China: Property price inflation rebounds in March – Nomura

China’s simple average of property price inflation across 70 cities rebounded to 0.4% m-o-m in March from 0.2% in February, notes the research team at Nomura.

Key Quotes

“The number of cities with sequentially higher prices rose to 55 in March from 44 in February, while the number of cities with lower prices ticked down to 10 from 16.”

“The March improvement was broadly based, with price inflation rising to 0.1% m-o-m from -0.4% in Tier-1 cities, to 0.3% from 0.1% in Tier-2 cities and to 0.5% from 0.4% in Tier-3/4 cities. Among the four big cities (Beijing, Shanghai, Shenzhen and Guangzhou), price inflation was negative only in Guangzhou.”

“Today’s property price data are inconsistent with weakening property sales growth data released yesterday. As policy tightening on the sector continues and as property sales growth is a leading indicator of property investment, we maintain our view that the property sector will cool in coming quarters.”

“That said, the rebound in property prices and the continued rise in property investment growth in March, if sustained, do pose upside risks to our view. We will continue to monitor whether property price and investment strength extends into Q2.”