(Yicai Global) Aug. 29 -- The latest figuresforconsumer good retail sales growth have raised many eyebrows. Total retail of consumer goodswas up 8.8 percent per year last month, statistics China's NationalBureau of Statistics recently released show.

Thisis slightly higher than the 8.5 percent recorded for May,but falls below the June growth rate by 0.2 of a percentage point. Consumer goods retail sales growth hit a multi-yearnadirsince 2004 inthe first seven months.

Consumption became the number one economic growth driver in China in 2016 and has stayed so ever since. Domesticspending contributed as much as 78.5 percent tonational economic growth in the first half, NBS data indicate.

High housing prices are weighing heavily on consumption, analyses by statistics bureaus in the provinces of Guangdong, Guizhou and Shaanxi suggest. As to whether housing costs are affecting consumers' spending power, the answer tothis question lies in the actual figures after the release of national and local balance sheets, NBS spokesperson Liu Aihua argued on Aug. 14.

Has housing affected people's spending power? Current homeowners and those struggling to buy properties returndifferinganswers.

A woman surnamedQian lives in a first-tier city. She and her husband exhaustedall their savings shortly after their 2014marriage toput a down payment on an apartment. "[The apartment] is not very spacious but it's big enough for us," she said.

"The monthly mortgage payment is CNY4,800(USD704), and thismay not seem a large amount," she told Yicai Global, "but it depends on how much we earn...disposable cash. Mortgage repayment now accounts for one-thirdof our monthly household income after deducting social insurance and provident housing fund contributions. We need to cover utility and phone bills, transport and everyday necessities and childcare, and there's little money left forother things,"Qian lamented.

Too Late

Spending one-thirdof one's total monthly income on mortgage paymentsis actually nobig dealthese days. Qian should be gladshe boughta home before it was too late. In 2015, the year after she purchased herapartment, both housing prices and sales volumeswent through the roofin many Chinese cities--Qian'sincluded --driven by oceans ofcredit and high financial leveraging.

More families are touching the redline in housing spending. A mortgage seriously affectsa household's living standard if it exceeds halfits totalincome. This principleapplies to most wage earners.

Mortgage payers are not the only ones sufferingfrom dwindling spending power. Some who have already paid off their mortgagesare in a likebind.

A new shopping mall opened last year near the apartment buildingof another lady, surnamed Yang. It features all the major fashion brands, but she seldomshopsthere.

Even when Yangdoes go to the supermarket in the mall, she is a window-shopper most of the time. A honey pomelo [Chinese grapefruit] was on sale a while ago. She sampled a bite.It was so sweet and savory, but sheput it back onthe shelf after looking at the price tag, she recalled. "I really wanted to buy some, but it was so expensive, more than CNY30 (USD4.40) for just six sections, only about half the whole fruit, I still remember it now. I would have bought it before, but I'mloath to part with the cash now," she told Yicai Global.

Yang no longer needs to repay any mortgage, but housing -- her next apartment -- is still uppermostin her mind. "My child will go to kindergarten soonand [we] need to trade up to anotherschool district."

Scrimping Online

Except for vegetables and fruit, "[we] buy more than 70 percent of other products on [Alibaba Group Holdings consumer-to-consumer and business-to-consumer e-commerce platforms] Taobao.com or Tmall.com," she noted, "the small savings that we realize by not going to shopping malls actually don't help much when it comes to buying a new apartment, but I still feel like saving oneverything I can."

Latecomers have found properties increasingly unaffordable. Some have already given up. Thesetend to have greater consumer spending powerin consequence.

Another woman surnamedShi lives in a rentalapartment in a first-tier city. She is less circumspectabout splurging. "Today's housing prices certainly curbmy spending power, but I can't stop buying things just because house prices are too high. If I can't buy an apartment in the next 10 years, does it mean that I have to live frugally [to save money and buy a property] for all these years? I can't let housing pricesdictate my life!" said Shi, who was just back from a holiday with her child and husband on a South Asian island.

The journey--including flights,lodging, sightseeing and shopping--sether back CNY40,000 (USD5,800) to CNY50,000, roughly equivalent to one to two months' earnings.

Just a few days after her vacation, Shi still struggleswith the question of whethershe should use every means at her disposal to make a down payment and buy a 'school district'property for her child.

Consumption remains an important economic growth driver, Tan Gang, vice president of the party school of the Shenzhen municipal party committee, noted in an interview with Yicai Global. The slowdown in consumption growthnecessitatesfindingand weakeningthe various factorsinducing the decline, he added.

Speculation Inoculation

"Like children's education and healthcare, housing is a main factor impactingconsumer spending thatrequires urgent resolution. Only areturn to housing minusspeculation andincreasedinvestment in people's livelihoodswill let them dare to consume,"he advised.

"Local governments have introduced and enacted stringent property purchase controls, and housing prices have stabilizedas a result, but governments still need to steadily ratchet up regulation of the rental housing market. Consumers'enthusiasmcan only stirif the government manages to allaytheir worries,"Tan concluded.

Editor: Ben Armour