Chinese Real Estate a Warning Sign for Commodities
Sluggishness in the country's real estate sector doesn't bode well for the broader commodities market.
Daniel Rohr: No country matters more to commodities than China. And within China, no single industry matters more to commodities than real estate. Much of the weakness we have seen in commodities over the past several months originates in the Chinese real estate market.
In the first five months of 2014, residential floor space sold declined 9%, meanwhile, residential floor space for sale increased 25%. So, on one hand we have got deteriorating demand, and on the other we have increasing supply, which sets the stage for weakness in the months to come.
Daniel Rohr does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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