It's Serious: Sept Prices Explode, NBS Delivers Mid-October Update

China's NBS released September housing prices today and they show a price explosion in September. In order to counter the shocking results, NBS took the extraordinary step of delivering a mid-month update. NBS broke out several hot first- and second-tier city price changes in October to show the world the government's housing crackdown is working.
The table shows much of the September increase reversed by mid=October, with Beijing for instance seeing a 3.7 percentage point drop versus the 4.9 base index increase in September. In other words, more than 70 percent of September's price gains were gone two weeks later.

As for the prices in September, they increased 1.8 percent nationally, an almost 24 percent annualized rate. Although NBS broke out top-tier cities for the October report, the September data shows the housing boom spread beyond these cities. The 12 hot cities I've broken out in prior months accounted for about 36 percent of the national increase, with the top-tier down to about 10 percent of the national total. Meanwhile smaller cities, such as Wuyi, saw big price explosions. Wuyi prices increased 8.2 percent in September, equivalent to about 40 percent of total price gain since the end of 2014.

NBS: 2016年9月份70个大中城市及10月上半月一线和热点二线城市住宅销售价格变动情况

Back at the start of August I posted China Must Choose: Defend Real Estate Prices or Exchange Rate

As the real estate crackdown has taken effect, the renminbi has sunk to new 5-year lows and approaches the red-line at USDCNY 6.83, with the U.S. Dollar Index also exhibiting a bullish breakout.

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