ECB Rate Hikes, EU Growth, China’s Sharp Economic Jolt: Eco Day
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Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:
China’s economy contracted in April, with Covid outbreaks and lockdowns dragging the industrial and consumer sectors down to the weakest levels since early 2020 as millions of residents were confined to their homes and factories were forced to halt production.
China’s central bank refrained from cutting interest rates despite mounting evidence of a sharp slowdown in economic growth, suggesting policy makers may be concerned about the currency’s depreciation and capital outflows.
Apollo Global Management Inc. is planning to lend about $1 billion to developers in India this year, betting on a recovery in the residential property market as the pandemic eases.
The UK is fast becoming the epicenter of the global stagflation crisis, as the Bank of England’s policy-tightening campaign and the soaring cost of living put the world’s fifth-biggest economy on the verge of recession.
May 2, 2019
BNN Bloomberg
,Home sales in the Greater Vancouver Area continued to fall in April as demand remained weak.
A total of 1,829 homes were sold in the region last month, a 29.1 per cent decrease from the 2,579 sales in the same month last year. However, there was a 5.9 per cent increase in sales from the 1,727 homes sold in March, according the Real Estate Board of Greater Vancouver (REBGV).
The real estate board blamed government intervention for continuing to hinder sales activity.
“The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing,” said REBGV President Ashley Smith in a release Thursday.
“Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.”
There has been a growing chorus of calls for mortgage stress test rules to be revisited so that they can become more flexible. The Office of the Superintendent of Financial Institutions introduced its B-20 guidelines, which applies a stress test to uninsured mortgages, in January 2018, and has been partly credited with cooling the country’s once-hot housing markets.
The continued slowdown in sales last month came as more inventory flooded the market. Indeed, there were 5,742 newly-listed homes for the region in the month, a 16- per-cent increase compared with March when 4,949 new properties were up for sale. There are 14,357 homes currently up for grabs, which is a 46.2 per cent increase from the same month last year.
“There are more homes for sale in our market today than we’ve seen since October 2014,” Smith said. “This trend is more about reduced demand than increased supply.”
While Vancouver housing market remains one of the most expensive in the country, home prices in the region continued to fall, with the composite benchmark price down 8.5 per cent year-over-year in April to $1,008,400.