CHINA PRESS: Economic Recovery Needs To Be Strengthened
China's economic recovery needs further policy support after January PMI data weakened from the end of last year, according to Wen Bin, chief economist at Minsheng Bank. Facing external uncertainties, action was needed to stabilise domestic demand as soon as possible, Wen added. Wang Zhe, senior economist at Caixin Group, said residents' willingness to consume must improve, highlighting the birth rate in 2024 remained low. The Caixin Service Industry PMI for January reached 51.0, down 1.2 percentage points from December, while the Caixin Manufacturing PMI fell 0.4 percentage points to 50.1, the lowest in nearly four months.
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MNI: AUSTRALIA NOV BUILDING APPROVALS -3.6% M/M, +3.2% Y/Y
- MNI: AUSTRALIA NOV BUILDING APPROVALS -3.6% M/M, +3.2% Y/Y
MNI: AUSTRALIA DEC DWELLING APPROVALS -3.6% M/M
- MNI: AUSTRALIA DEC DWELLING APPROVALS -3.6% M/M
- MNI: AUSTRALIA DEC DWELLING APPROVALS +3.2% Y/Y
NEW ZEALAND: Signs Of Recovery In Housing Market
NZ CoreLogic home values fell 0.2% m/m in December to be down 3.9% y/y after -3.2% y/y. They have not posted a monthly increase since February but the 2024 average level was still 1.3% above 2023’s. There are signs that house prices may begin to rise again in 2025 as mortgage rates fall, new supply remains weak and affordability improves.
NZ home prices y/y%
- Q3 housing affordability recorded the third consecutive quarterly improvement to be up 3.2% y/y, the first annual rise since Q1 2021, but still 30% below trend. While incomes remain weak, the average mortgage rate was down around 90bp on the year in Q4 and house prices fell 3.1% y/y – helping to support a turn in affordability.
- This shift appears already to be supporting a recovery in demand with the REINZ reporting a 10.8% y/y rise in transactions in November and a drop in the number of days to sell to 42 from the 2024 peak of around 50. The median selling price is now up 0.6% y/y.
- Supply also remains constrained with October building consents for new dwellings still soft declining 3.5% y/y 3-month average but not as weak as they have been.
- Housing became more undervalued over the last year with it 12% below trend in Q3 compared with 6% below in Q3 2023, as measured by the ratio of house prices to CPI rents. Valuations should also encourage buyers into the market.
- While more respondents in the Q4 RBNZ household survey continued to expect lower house prices, the share is shifting back towards the neutral 50% level after almost 75% believed they would fall in Q3.
NZ affordability vs valuation % deviation from trend
