China’s new home prices for its 70 major cities rose 0.66% month-on-month in June, down from the 0.71% rise seen in May; year-on-year prices were up 10.1%.

Our thoughts: Looking at the various cities, the slowdown was mainly led by Tier 1 and 3 cities which recorded 0.25% and 0.58% month-on-month increases. However, Tier 2 cities continued to outperform expectations with prices up 0.8% month-on-month as many had loosened on resident permit requirements which is a requirement to buy homes. While the government has stayed firm on general housing policy controls, especially those over the T1 markets, our expectations are for the government to allow localized adaptation of those controls such as those facing slowing economies and rising housing inventories.