Signal Chinese home prices falling for four and a half years and still accelerating

Summary

Eurasia Group reports that house prices in China have been declining for four and a half years. It likens the resulting loss of household wealth to the American housing crash of 2008, with the difference that China's fall is still speeding up. Consumer confidence, investment and domestic demand have collapsed along with property values. Beijing hoped high-tech manufacturing would replace property as a growth engine, but the report says this produced overcapacity instead. The signal shows why weak household demand sits at the centre of China's deflation trap.