China’s new home price growth slows as big cities decline

Home price growth began to slow in the second half of 2017 as the Chinese government sought to deal with bubbles in its property markets, following almost two years of rapid expansion. (Reuters)
Updated 19 March 2018
0

China’s new home price growth slows as big cities decline

China’s new home price growth slowed in February from the previous month as a raft of government curbs aimed at tempering speculative demand softened prices in the biggest cities, although strength seen in smaller centers remained intact.
Average new home prices in China’s 70 major cities rose 0.2 percent in February from the previous month, compared with an increase of 0.3 percent in January, Reuters’ calculations from National Bureau of Statistics (NBS) data on Monday showed.
Compared with a year ago, they rose 5.2 percent in the month, picking up from a 5.0 percent increase in January.
Prices fell in China’s top-tier cities after they stabilized in January, the NBS said in a statement accompanying the data, without giving a specific figure.
Shenzhen’s new home prices fell 0.6 percent month-on-month, after it stabilized in January. Beijing prices declined 0.3 percent after posting a 0.2 percent increase in the previous month, data showed.
“I think the policies currently in place (to curb speculation) are effective in a way that they made prices fall slightly in prime markets,” said ING economist Iris Pang.
“But they also result in a spillover effect that drives buyers who can’t afford in those big cities to less expensive markets, which will continue to push up prices,” she said, adding that she doesn’t expect significant price falls in the biggest cities, despite the curbs.
The majority of the 70 cities surveyed by the NBS still reported monthly price increases for new homes although the number has dropped from the previous month. Forty-four cities reported higher prices in February, down from January’s 52.
The declines in the four top-tier cities contrast with a steady rise in prices in China’s vast spread of smaller cities. The fastest price gain was seen in Nanchong, a lower-tier city of about 6 million in Southwestern China’s Sichuan province, where values of new homes rose 1.7 percent on-month in February.
Price growth in tier-3 cities in general was unchanged from January, the NBS said, without giving details.
China removed sales prices for affordable housing in its January calculations, which prevents like-for-like comparisons with growth data before 2018.
Home price growth began to slow in the second half of 2017 as the government sought to deal with bubbles in its property markets, following almost two years of rapid expansion.
Property sales have shown signs of easing in recent months despite expectations of a spike in demand as developers ramp up promotions during the week-long Lunar New Year holidays when migrant workers head home.
But analysts have remained optimistic about demand in smaller tier-3 and tier-4 cities thanks to favorable government policies aimed at reducing inventories.
Authorities are seeking to balance attempts to support real economic activity with efforts to rein in risks from an increasingly complex financial system.
Household loans — mainly mortgages — increased by 275.1 billion yuan in February, well below expectations and sharply down on January’s record of 901.6 billion yuan.
Policymakers have vowed to push the stable and healthy development of the property market this year, emphasizing that homes are for living in, not speculative investment.
China will focus more on providing affordable housing and developing the rental market, Premier Li Keqiang announced earlier this month.
The country is also steadily pushing for a property tax law this year and expect it completed by 2020.


Infectious diseases are set to become as great a risk for global business as climate change

Updated 19 January 2019
0

Infectious diseases are set to become as great a risk for global business as climate change

LONDON: The Global Risks Report 2019 jointly compiled by the World Economic Forum (WEF) and the Harvard Global Heath Institute describes a world that is woefully ill-prepared to detect and respond to disease outbreaks.
In fact, the world is becoming more vulnerable to pandemics, despite advances in medicine and public health.
Global GDP will fall by an average of 0.7 percent or $570 billion because of pandemics — a threat that is “in the same order of magnitude” to the losses estimated to be caused by climate change in the coming decades.
“Outbreaks are a top global economic risk and — like the case for climate change — large companies can no longer afford to stay on the sidelines,” said Vanessa Candeias, who heads the committee on future health and health care at the WEF.
Potential catastrophic outbreaks of disease occur only every few decades but regional and local epidemics are becoming more common. There have been nearly 200 a year in recent times and outbreaks of diseases such as influenza, Ebola, zika, yellow fever, SARS, and MERS have become more frequent over the last 30 years.
At the same time antibiotics have become less effective against bacteria.
The impact of influenza pandemics is estimated at $60 billion, according to a report by the Commission on a Global Health Risk Framework for the Future — more than double previous estimates.
The trend is expected to get worse as populations increase and become more mobile due to travel, trade or displacement. Deforestation and climate change are also factors.
Businesses need to bone up on the risk of infectious diseases and how to manage them if the overall economy is to remain resilient.
Peter Sands, research fellow at the Harvard Global Health Institute and executive director of the Global Fund to Fight Aids, Tuberculosis and Malaria, said, “When business leaders are more aware of what’s at stake, maybe there will be a different dialogue about global health, from being a topic that rarely touches the radar screen of business leaders to being a subject worthy of attention, investment and advocacy.”
Predicting where and when the next outbreak will come is an evolving science but it is possible to identify certain factors that would leave companies vulnerable to financial losses, such as the nature of the business, geographical location of the workforce, the customer base and supply chain.
Disease is not the only threat. There is also fear uninformed panic. Past epidemics have shown that misinformation spreads as fast as the infection itself and can undermine and disrupt medical response.
The report advises planning for such emergencies by “trusted public-private partnerships” so that “businesses can help mitigate the potentially devastating human and economic impacts of epidemics while protecting the interests of their employees and commercial operations.”
It is estimated that the outbreak of Ebola in West Africa in 2014-2016 cost $53 billion in lost commercial income and the 2015 MERS outbreak in South Korea cost $8.5 billion. According to the World Bank, disease accounts for only 30 percent of economic losses. The rest is largely down to healthy people changing their behavior as they seek to avoid becoming infected themselves.
The authors of the report will make recommendations next week at the World Economic Forum annual meeting in Davos.