Fitch: China's cooling housing market set to weigh on economy

The US-based ratings agency, Fitch ratings, is out with its latest report on cooling Chinese housing markets, underscoring its negative impact on the economy.

Key Points:

China's housing market is likely to continue to cool in response to stronger restrictions on home purchases across many cities and tighter credit conditions.

Housing is the key cyclical sector in the Chinese economy, and will weigh on growth in the second half of the year and into 2018.

There is already evidence that the housing market is slowing. 

The downturn has been policy driven, with the authorities stepping in to prevent excessive froth in the market.

Tightened rules on home purchases and mortgages are curbing buying by speculators and upgraders. 

The near-term outlook for China's housing market is closely linked to the domestic credit cycle.

The economic impact of a slowdown in China's housing market is one of themes examined in our "Global Economic Outlook - June 2017".