China housing market to continue improving

Increases in new home prices expanded to 27 out of 70 cities in China in June, reaching 14-month high, while the differentiation in trends between markets in the Tier-1 and other cities widened. In line with the better-than-expected Q2 growth outturn, property prices continue to pick up, accompanied by improving property sales. 

The recovery follows a number of interest rate cuts in H1 2015 and other housing market easing measures such as lower down-payment requirements. 

"Looking ahead, the housing market will continue to improve, though at a modest pace, and support a stabilisation in growth", says Barclays. 

The overall macro policy mix to stay accommodative in H2 2015, with an easing bias given the continued downside risks to growth and the large pipeline of local government debt issuance.