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The Cost of Another Housing Slump in China

MIN READJul 15, 2016 | 09:30 GMT

The Cost of Another Housing Slump in China
Prospective homebuyers visit a housing fair last October in China's Hubei province. After a nearly two-year slump, China's housing market seemed to resurge in early 2016. Now, signs of stagnation suggest that another downturn may be in store.

(STR/AFP/Getty Images)

After a nearly two-year decline, China's housing market got off to a relatively strong start in 2016, propelled by surging home prices in coastal metropolises such as Shenzhen, expanded fiscal support, and relaxed restrictions on home purchases nationwide. In light of the otherwise anemic performance of the Chinese and global economies, the recovery of China's massive real estate sector -- which, by some estimates, contributes at least 25 percent of the country's gross domestic product in construction alone -- is no small feat. But housing data for May could herald yet another slowdown, at least in premier property markets. Month-on-month, home prices rose in just 60 of 70 surveyed cities, down from 65 in April. If June home price figures, to be released July 18, continue in the same direction, it could mark the start of a protracted downturn in China's most important sector. And for some parts of the...

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