House prices still too high, PBOC poll says

House prices in China remained "too high" in the second quarter of this year, though fewer people thought so than in the first three months, according to a central bank poll.

In its quarterly survey, the People's Bank of China found that 63 percent of respondents thought prices were prohibitively high, down from 64.3 percent who thought so in the previous poll.

Exactly half of those questioned said they thought prices would remain unchanged in the coming quarter, while 21 percent said they expected them to rise.

The survey polled 20,000 households in 50 cities.

Meanwhile, the house price expectations indicator, a sub-index of the Westpac MNI China Consumer Sentiment Index, in June rose to its highest level for more than three years, the Australian bank said yesterday.

"Consumers are still positive about the six-month outlook for house prices and they collectively gauge that it remains a good time to buy a property," Westpac said.

The changing outlook came as China's property sector continued to cool in May, as new home prices in half of the 70 major cities monitored showed month-on-month drops.

The central bank report also said that in the second quarter people favored saving over investment. For those who did invest, the top-three classes were mutual funds and wealth management products, bonds and real estate.

Meanwhile, the entrepreneur confidence index for the second quarter fell 2.1 points from the previous three months to 64.9 percent, the PBOC said in a separate report, citing results of a poll of 5,900 businesspeople.

In another report, the central bank said the second-quarter bankers confidence index — based on a poll of 3,100 — fell 13.9 points from the previous quarter to 53.7 percent.

The pace of China's economic growth slowed to 7.4 percent in the first quarter, marking the lowest quarterly expansion since the third quarter of 2012, but key indicators suggest it is gaining in strength.

Growth in the manufacturing sector continued to accelerate in May, hitting a five-month high that pointed to a stabilizing economy.

Despite that, people remain concerned about employment.

Of the 20,000 savers polled by the PBOC, 44 percent said employment conditions are "harsh" or "murky." Their expectation index was 47.8 percent, down 2.1 percentage points from a quarter earlier.