“Signs of hope in China home price data,” is what CNBC called it today.

Prices of new homes in China fell 5.7% year over year in May, after diving 6.1% in April. But here they are, the “signs of hope”: month on month, prices ticked up 0.2%, the first rise after a relentless slide that had started in April 2014.

Year over year, prices dropped 2.3% in Shanghai and Beijing in May, compared with 4.7% and 3.2% respectively in April. So things are looking up. And in Shenzhen, home prices jumped 7.5% year over year. So the rosy scenario is already on the horizon again.

“What we see in the tier one and two cities is a recovery in volumes, and prices are creeping up, but on the other hand, tier three and four cities, given the oversupply situation, are still at the bottom,” Wee Liat Lee, regional head of property research at BNP Paribas, told CNBC.

The property market has “bottomed out,” he said. But the recovery was dual-paced. “We are not seeing prices dropping, but we are seeing a floor after the government’s support to stimulate the market,” he said.

Maybe.

But also today, Bank National Financial Markets Senior Economist Krishen Rangasamy, in Canada, had a slightly more cautious view, introduced with this relentlessly terrible chart of the China Real Estate Climate Index at its worst level since the Asian Financial Crisis in 1998:

In the bank’s Monthly Economic Monitor, Rangasamy writes:

China is another source of uncertainty for the world economy. With its policies aimed at rebalancing the economy towards consumption and away from exports, Beijing has decided to sacrifice near-term growth for more sustainable growth over the longer term. But unexpected headwinds including slower global growth and a moderation in domestic demand are complicating matters….

The unregulated shadow banking sector is also a concern given the lack of credible information about its size and exposure to a sinking real estate market. The latter’s continued deterioration despite extraordinary support from monetary and fiscal stimulus is concerning. We now expect the fallout from the real estate drop to weigh more significantly on the economy next year….

So the jury will be arguing over this for a while. But real-estate busts have a nasty habit of showing false bottoms and ticking up occasionally to confound the hard-landing gurus and give folks some hope to hang on to. Sometimes it works out, sometimes it doesn’t.

But there are other indications that this time it’s going to be tough. Read…  “China Momentum Indicator” at Hard-Landing Level

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