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Chinese buy less properties as confidence erodes
By Wang Yanlin |
October 10, 2012, Wednesday
|
Online Edition
Online Edition
CHINESE households showed less confidence in China's economy and their interest in buying properties dropped again amid rising home prices, a survey by the Bank of Communications said today.
The China Wealth Index, compiled by the bank's economic research center and Nielsen Co, stood at 113 in September, a record low since the survey started two years ago and falling from 120 in July. A reading above 100 means optimism.
The component index measuring people's confidence in the economy slid to 101, very close to the demarcation.
"It seems China did not do enough to stop the economic downturn," said Lian Ping, chief economist at the Bank of Communications. "Businesses are facing troubles when demand at both home and abroad remains weak, and the property market did not show a marked rebound with the restrictive policies still in place."
Lian said people have turned to believe the current economic slowdown in China will be a long-term phenomenon and they have less confidence.
As a result, the index of willingness to purchase real estate assets fell to 104 in September after steady increases since January.
Statistics showed China's new home prices rose for the fourth straight month in September with the average property price across 100 mainland cities edging up 0.17 percent to 8,753 yuan (US$1,391) per square meter.
But Lian said there is limited space for housing prices to go up further as the government retains a tough stance to fight speculation in the sector.
Chinese families are also less interested in buying stocks, bonds, wealth management products, art collections and gold with the related index shedding 11 points to 112 in September.
The index, released every two months, is based on interviews with 1,955 households in major Chinese cities.
China's gross domestic product grew 7.6 percent in the second quarter, the slowest pace in three years. Early this week, the World Bank and the International Monetary Fund both slashed their 2012 growth forecasts for China to 7.7 percent and 7.8 percent respectively.
The China Wealth Index, compiled by the bank's economic research center and Nielsen Co, stood at 113 in September, a record low since the survey started two years ago and falling from 120 in July. A reading above 100 means optimism.
The component index measuring people's confidence in the economy slid to 101, very close to the demarcation.
"It seems China did not do enough to stop the economic downturn," said Lian Ping, chief economist at the Bank of Communications. "Businesses are facing troubles when demand at both home and abroad remains weak, and the property market did not show a marked rebound with the restrictive policies still in place."
Lian said people have turned to believe the current economic slowdown in China will be a long-term phenomenon and they have less confidence.
As a result, the index of willingness to purchase real estate assets fell to 104 in September after steady increases since January.
Statistics showed China's new home prices rose for the fourth straight month in September with the average property price across 100 mainland cities edging up 0.17 percent to 8,753 yuan (US$1,391) per square meter.
But Lian said there is limited space for housing prices to go up further as the government retains a tough stance to fight speculation in the sector.
Chinese families are also less interested in buying stocks, bonds, wealth management products, art collections and gold with the related index shedding 11 points to 112 in September.
The index, released every two months, is based on interviews with 1,955 households in major Chinese cities.
China's gross domestic product grew 7.6 percent in the second quarter, the slowest pace in three years. Early this week, the World Bank and the International Monetary Fund both slashed their 2012 growth forecasts for China to 7.7 percent and 7.8 percent respectively.
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