Another clue China's economy is going soft: Vancouver home sales hit a 10-year low

The National Post reports that June home sales hit a 10-year low.

The Real Estate Board of Greater Vancouver said there were 2,362 property sales in June, a 27.6% drop from a year earlier and a 17.2% decline from May.

There is the beginning of a trend,” said [Benjamin Tal, deputy economist with CIBC World Markets] about the steep decline in Vancouver sales from May. "We see significant softening in investment, we see reduced penetration of Chinese money into the city. I’m not surprised by this."

British Columbia, which doesn't restrict foreign ownership of real estate, is popular with Chinese investors who want to diversify their asset base. Actual numbers of foreign buyers are hard to come by. In 2011 Vancouver ranked second on a global list of unaffordable real estate markets.

A chill in the Vancouver housing market is coinciding with economic softness in China.

ChinaDaily reports that non-performing loans are starting to hit banks. Banks officials say that despite the headwinds, the risks are manageable.

"But the risks are still controllable, and it is impossible that a systemic crisis could break out in the banking sector," Xiao Gang, chairman of Bank of China Ltd, said at a news conference on Thursday during the two-day China-Japan Entrepreneurs Exchange Meeting of the Boao Forum for Asia.

In the first half of this year, especially in the first four months, China's slowing economic growth added to credit risks in the banking system, thanks to gloomy corporate earnings, especially in the property sector, which affected local governments' repayment ability, said Xiao.

Hat tip, David Frum