Real estate investment growth

The boom in China’s property market has raised concerns about a bubble, which has prompted authorities to tame property prices through tighter credit and other curbs. These curbs are affecting the market.

In this article, we’ll see what the latest data from China’s property market could mean for iron ore.

China’s Property Growth Is Cooling Off Again, Affecting Iron Ore

China’s property investment growth cooled to 8.4% YoY (year-over-year) in June from 9.8% growth in May, which was slower than April’s 10.2% growth, according to Reuters’ calculations based on data from the National Bureau of Statistics.

Growth in sales and construction starts

In line with the slowdown in real estate investment growth, property sales area growth also depicted a fall in June. Property sales as measured by floor area rose 4.5% YoY, lower than the 8.0% rise recorded in May.

New construction starts as measured by floor area grew 15% in June compared to 20.5% in May.

China’s home prices, on the other hand, remained stable in June. New residential housing prices in first-tier cities increased 0.6% sequentially in June.

Will China’s growth cool off again?

China’s property market (TAO) has shown signs of heating up again in June. Its housing ministry issued two warnings about the current rebound and how it could put curbs in place to rein in home prices. Authorities are trying to maintain a consistent housing policy, and their policy measures seem to be having an effect.

A crackdown by Chinese authorities on the property market could mean a tougher road ahead for iron ore miners. While Vale SA (VALE), the world’s largest iron ore producer, is based in Brazil, BHP (BHP) (BBL), Rio Tinto (RIO), and Fortescue Metals Group (FSUGY) have their major seaborne operations in Australia.

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