UPDATE 1-China households see home prices rising-c.bank survey

Tue Mar 19, 2013 5:44am EDT

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* Business outlook rising, profit expectations improving

BEIJING, March 19 (Reuters) - Chinese households expect home prices to rise in coming months although their expectations of overall consumer inflation are easing somewhat, according to central bank surveys published on Tuesday.

Among 20,000 households surveyed, some 34.4 percent of respondents expected home prices to increase in the second quarter, up 5.4 percentage points from the previous survey.

The findings reinforced data showing a recent rebound in transaction volumes and prices despite Beijing's measures to curb the bubbling sector.

About 38.6 percent of respondents expected consumer prices to rise further in the second quarter, easing from 41.8 percent in the previous survey.

But 62.1 percent of surveyed consumers said they were dissatisfied with inflation in the first quarter, saying prices were too high, compared with 58.5 percent in the previous survey.

Inflation expectations are one of the most important factors that the central bank takes into account when it is deciding monetary policy.

Central bank chief Zhou Xiaochuan had earlier said China must stabilise inflation expectations and pledged to vigilantly manage the risks of rising prices as the economy recovers.

China's annual consumer inflation quickened to 3.2 percent last month largely due to seasonal factors and many economists expect prices to trend up further starting from the second half of this year, which could prompt the central bank to tighten its grip on liquidity.

The People's Bank of China's survey of bankers for the first quarter of 2013 also showed that more Chinese bankers are confident about the economy and believe monetary policy settings are appropriate compared to the previous survey.

About 78.2 percent of bankers who responded to the survey believed that the central bank's monetary policy stance was appropriate, up 3.2 percentage points from last survey conducted in the fourth quarter last year.

The survey showed the index of bankers' confidence on macro-economy rose to 72.2 percent, up 17.2 percentage points from the previous survey.

The Chinese economy has snapped out of a seven-quarter long slowdown and started to pick up from the last quarter of 2012, as it regains internal strength following Beijing's pro-growth policies. Annual economic growth slowed to 7.8 percent last year, the slowest pace since 1999.

The survey also found the bank loans demand index reached 77.4 percent, up 6.3 percentage points from the previous quarter.

Meanwhile, a separate survey of 5,000 company managers showed their profit expectations were rising and that their business outlook for the next quarter had also turned up, a finding likely to reinforce the views of investors anticipating an uptick in the world's second biggest economy as it continues its mild recovery.

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