China's household confidence stays stable but willingness to buy property weakens again

China’s household confidence remained stable but people’s willingness to buy property dimmed again after several cities imposed tougher measures to calm the housing market, a survey showed today. 

The China Wealth Index, compiled every three months by Bank of Communications and research firm Nielsen, fell to 139 in October from 140 in July.

A reading above 100 reflects optimism among 1,879 households interviewed.

“The results were largely stable,” said Lian Ping, chief economist of BoCom. “People’s confidence remained unchanged from the two-year high recorded in July...except  in the real estate sector.”

A sub-index measuring people’s willingness to invest in real estate lost 2 points to 113 after it rose for the first time in July’s survey.

The drop was due to several cities, including second-tier ones like Xi’an, Nanchang and Changsha, imposing new measures related to tax and deposits to curb speculation in the red-hot housing market over the past two months.

China’s economy remained relatively strong. In the first half, its economy grew 6.9 percent, with consumption and services contributing a  major share of the economic growth.

The better-than-expected growth prompted the International Monetary Fund to upgrade its forecast for Chinese economic growth this year to 6.8 percent and next year to 6.5 percent.