China Property Prices Rise for Third Straight Month. this is the head line of a wall street journal article
dated 9/18/12 here is an excerpt from the article thank you Wall Street Journal, all rights reserved
"Dow Jones Newswires' calculations showed prices in the 70 cities increased by 0.05% on average in August from a month earlier, compared with a 0.13% increase in July and a 0.02% increase in June.
Prices of newly built homes in major cities such as Beijing, Chongqing and Shenzhen were marginally higher in August compared with July.
Prices fell 1.19% on average in August from a year earlier, decelerating from a 1.23% decrease in July and slower than a 1.30% decline in June, according to calculations by Dow Jones Newswires.
The real-estate market suffered under more than two years of a government campaign to prevent excessive price rises, but signs of a turnaround appeared after the government began supporting first-home buyers in February as part of efforts to prop up a slowing economy. Housing inventories are now being whittled down at a slightly faster pace in China's first and second tier cities, but remain high in lower tier cities."
Sounds counterintuitive, but home price increases are bad for Chinese developer stocks. If you fail to realize this, you are new to Chinese developer stocks and unfamiliar with the current Chinese political environment.
yes at first rising prices were bad for developers (and other business as well) as china tightened and raised rates and reserve requirements to control inflation in housing and food but china cannot raise intrest rates or reseve requirements on banks as the other parts of the economy it is effecting manufacturing, jobs etc. they would suffer worse slowdowns. you cannot go to a consumer society if people are losing jobs. but they can raise wages lower intrest rates ease reserve requirements and may be forced into their own QE?,(due to us and europe). so i think the developers or at least the good ones will reap more profits from this quandary as prices rise in housing the chinese government will need to find a balance a little inflation in housing (and it has slowed) or kill the rest of the economy so I betting on inflation as with any fiat currency this is what happens. as they say place your bets. this is the short version btw