Macro and Politics

* The Residential Property Price Index (RPPI) increased by 1.8% m/m and 26.6% y/y in April, reaching 223.4, while declining by 4.3% y/y in real terms. Recall that the real annual change in the RPPI had turned positive at 0.2% in November for the first time since January 2024, before reverting back into negative territory as of December. In this respect, the April reading suggests that residential property prices continue to lose value against inflation.  Meanwhile, the New Tenant Rent Index (NTRI) rose by 1.7% m/m and 31.7% y/y to 309.4 in April, while posting a real annual decline of 0.5%. Accordingly, the NTRI contracted in real terms on an annual basis for the first time since January 2020. This configuration points to weak real returns in the housing market despite the ongoing increase in nominal prices. In particular, the continued tight monetary stance, ongoing constraints on credit access, and elevated financing costs continue to weigh on housing demand, while the still-high inflation environment keeps nominal prices on an upward trajectory. On the rental side, the NTRI posting a real annual contraction for the first time in an extended period suggests that the upward momentum in rent inflation has started to moderate on a relative basis.