China’s National Bureau of Statistics (NBS) released May’s data on house prices and retail sales, which showed that despite cooling in the rate of growth, the economic stimulus measures being undertaken by the government are still driving the economy in the right direction.
The modest recovery in China’s housing market in the first five months this year has sustained the economy although the increment of house pricing had a slow start. Compared to a month before, May house prices in 70 medium and large-sized cities declined in four, increased in 60 and were flat in the others. Year-on-year house prices fell in 18 cities and rose in 50.
If house prices continue to ease, China government may boost places with below average home sales or turn to other drivers to boost the economy. Prospects for new home building dampened in the first five months of this year as investment in real estate development increased only slightly and was down year-on-year.