The slow pop: China's housing market is deflating

8/16/22 8:00PM

The Chinese property pop

‍The Chinese housing market has missed the inflation memo. New data out this week showed Chinese new-home prices in the country falling roughly 1% in the last year, breaking more than 6 consecutive years of rising prices.

Although a relatively small drop, the fall in new-home prices is just the latest piece of evidence that paints a concerning picture for the largest residential property market in the world. Sales of apartments by the country's largest developers have fallen for 13 months straight and hundreds of buildings that were presold have been left unfinished — leading some homeowners to stop paying their mortgage, a rare show of dissent in the country. All told, the WSJ estimates that billions of square meters of residential homes have been started, but not yet completed, in the last decade.

‍All hands on deck

‍Chinese officials are doing all they can with numerous policies aimed at reinvigorating the sputtering sector and keeping the increasingly indebted property developers in business. One Chinese party secretary even went as far as to play the role of realtor, urging the country's leadership to lead the charge in buying property, saying "If you’ve bought one, buy two. If you’ve bought two, buy three. If you’ve bought three, buy four" in a speech yesterday.

Hyunsoo Rim

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.