HONG KONG, May 9 /Xinhua-PRNewswire/ --
Chinese real estate investment to provide clues on liquidity
Thursday 15th sees the release of the latest Chinese data on fixed asset investment into urban areas. This will provide an insight into whether policy tightening by the peoples Bank of china is starting to have the desired impact of containing the threat of rising inflation which hit 8.5% in April, close to a 12 year high.
Money supply growth based on the M2 measure eased for the second consecutive month to 16.3% in March down from 18.9% in January, marking the slowest pace of growth since January 2007.
UK IPD data to show further moderation in decline
The April IPD monthly property index is due to be released on Thursday 15th. These numbers will be particularly interesting in the light of the March data, which showed some returns.
A key issue looking forward is how tenant demand responds to the slowing economy. The latest RICS Commercial Market survey suggests that occupiers are certainly becoming more cautious.
German house prices likely to fall further
German house price data is due to be released with the April update of its House Price Index. The headline index fell by 4.7% y/y in March, the sharpest fall since the series began (January 2005).
There are three factors weighing down on German house prices: 1) mortgage leading rates increased; 2) German VAT raised by 3% to 19%; 3) the largest single tax deduction available for homeowners was abolished.
Looking forward there are several reasons to believe that house prices will continue to fall in Germany over the balance of this year.
US housing starts to decline with more job losses to come
Data on US housing is to be released on Friday 16th and is likely to show further decline.
The deterioration in the residential sector continues to weigh on the construction industry. Residential construction expenditures have fallen by 36% since their peak in February 2006.
Less work means fewer workers and the downturn in construction has been a key driver of the recent weakening in the US labour market.
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