China house prices stumble into the positive

China’s 70 city hose prices are out for May and show slow improvement. Nationwide new home prices rose 0.2% on the month and pulled back the annual fall to -5.7%:

The ratio of rising prices to falling improved to 21 cities up and 23 down (from 47 down in April):

Splitting by tiers tells the real tale which is market bifurcation with first tier city prices at –0.4%, second tier at –6.1%, and third tier and lower at –6.5%:

With 95% of construction in sub-tier one cities, and 80% sub-tier two cities, this market is still weighing very heavily on commodity demand.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.