China Property Malaise Spreads to Furnishings

China's property prices fell for the fourth straight month in December, adding further pressure on Chinese consumers at a time when both the domestic and global economy increasingly depend on their spending, The Wall Street Journal reported. The property slump has triggered a slowdown in sales growth of goods ranging from furniture to refrigerators. Investment in residential real estate accounts for about 12% of China's economy, but as much as 25% is tied up in a broader category that also includes industries such as construction materials and appliances, according to economists. The government had hoped that its efforts to rein in soaring real-estate prices would mean more Chinese would be able to buy homes, which in turn would keep demand for home furnishings humming. But the uncertainty around housing prices has scared away many new home buyers, making for a deeper-than-expected impact on the housing market and beyond. That could complicate China's efforts to manage a slowdown in its economy, which is increasingly geared toward domestic consumption at a time of declining demand from Europe and the U.S. Read more. (Subscription required.)

In a related story, The Wall Street Journal reported that, with the market volatile and mortgage rates rising, the number of property transactions in Hong Kong fell to a five-year low in 2011, the city's largest real-estate agency said Wednesday. Read more. (Subscription required.)