China’s January home prices rise

Properties under construction in the Daya Bay district in Huizhou, Guangdong province. Real estate prices in China continue to strengthen overall despite a decline in the big cities. (Reuters)
Updated 24 February 2018
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China’s January home prices rise

BEIJING: China’s new home prices grew in January although major cities saw early signs of softening, as the government continued its efforts to rein in speculative demand to fend off bubble risk.
The acceleration in prices across the nation suggests moves by provincial governments to support first-time buyers and upgraders by relaxing some purchase restrictions may be further fanning price gains in a market where fear of missing out is strong and mortgage fraud is rampant.
Average new home prices in China’s 70 major cities rose 5 percent in January from a year earlier and 0.3 percent month on month, according to Reuters calculations based on the data from the statistics bureau on Saturday.
The government removed the sales prices for affordable housing from the latest monthly calculations, distorting comparisons with previous months’ growth data.
Prices in December grew 5.3 percent on year and 0.4 percent on month, based on data which included affordable housing.
The National Bureau of Statistics said in a statement that prices were “stable while slightly lower” last month, as eleven major cities fell year on year.
“The housing prices in tier-one cities reversed from growth to a decline and there was a slowdown in the growth rate in tier two and three cities,” it said.
China’s housing market has boomed since late 2015, giving a major boost to the economy, but is expected to gradually slow as measures to curb property speculation drag on sales.
The challenge for policymakers is to counter the risks from a slowdown in the sector and curbs to excessive borrowing without endangering a growth target of around 6.5 percent this year. A softening but still resilient property market, however, will be welcome news ahead of the annual parliament meeting in March where leaders will set economic targets for 2018.
The data marks the first price decline in tier one cities in more than two years, said Yan Yuejin, an analyst with Shanghai-based E-house China R&D Institute.
Purchase restrictions are also trickling down into lower-tier cities, while monetary policy tightening is leading to higher mortgage rates.
“Tier two and three cities will probably experience a similar decline,” he said.
Those have started knocking some heat off the market. Property sales have slowed across three different tiers in January by more than 10 percent in 15 major cities monitored by China Index Academy, a private property research firm.
Official property sales and investment data for January-February will be released by the Statistics Bureau on March 14.
But demand appeared to be more resilient than expected amid government moves to support “rigid demand” of first-time buyers and upgraders by relaxing some purchase restrictions.
The central Chinese city of Wuhan, for example, announced a pilot program in February that allows first-time buyers priority in winning new home purchase bids.
Some analysts noted that China’s housing market is becoming increasingly polarized, as prices in some smaller cities with no purchase restrictions picked up visibly but were flat or declined slightly month-on-month in most of the biggest cities.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.