China’s property sector is still struggling with heavy debt burdens. In July, new home prices in China decreased by 2.8% on a year-on-year basis. <\/p>\n
This was an improvement compared to a 3.2% decline in June. On a month-to-month comparison, prices dropped by 0.3%, consistent with June’s decrease.<\/p>\n
With China’s new home prices falling 2.8% year-on-year in July 2025, the property sector’s weakness remains a core theme for us. While this is a slight improvement from June’s 3.2% drop, the consistent month-on-month decline of 0.3% signals no real turnaround is underway. The primary strategy should therefore remain cautious to bearish on China-exposed assets.<\/p>\n
We see the impact directly in industrial commodities, as construction accounts for a huge portion of demand. Iron ore futures have reflected this pessimism, with Dalian contracts struggling to hold the $95 per tonne support level throughout August 2025. This suggests traders should consider buying put options on major mining ETFs or shorting copper futures, anticipating that demand will not recover in the third quarter.<\/p>\n
This sustained property slump continues to weigh on the Australian dollar, given Australia\u2019s reliance on shipping raw materials to China. The AUD\/USD pair has recently fallen below 0.6400, a level we haven’t seen since the first quarter of 2025. We believe positions that bet on further Aussie dollar weakness are justified, especially as the interest rate differential with the US dollar offers little support.<\/p>\n
The persistent anxiety is also creating opportunities in volatility markets. The Hang Seng Mainland Properties Index has lost another 12% so far in 2025, continuing the multi-year slump we’ve witnessed since the early part of the decade. Given the potential for sudden government policy announcements, buying straddles or strangles on broad China ETFs like FXI allows traders to profit from a large price move in either direction.<\/p>\n
Even with the slight moderation in the year-on-year price decline, we should be wary of betting on a significant recovery. Beijing’s stimulus measures announced earlier in 2025 have clearly failed to spark a meaningful rebound in buyer confidence. Therefore, selling call spreads on Chinese real estate developer stocks listed in Hong Kong could be a prudent way to collect premium while betting that any upside will be limited in the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" China’s property market remains weak as new home prices fall 2.8% year-on-year despite slight improvement.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29150","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=29150"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29150\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}