Unfinished apartment buildings stand at a residential complex developed by Jiadengbao Real Estate in Guilin, Guangxi Zhuang Autonomous Region, China, on September 17, 2022. Reuters/Eduardo Baptista/File Photo Get licensing rights
Thank you for reading this post, don't forget to subscribe!- Property market struggling to recover despite several stimulus measures
- Economic uncertainty, low confidence among buyers have hurt demand
- The debt crisis in the region continues to have a major negative impact on the outlook
HONG KONG/BEIJING, Oct 20 (Reuters) – China’s troubled property market is showing little sign of improvement in the short term despite a series of government stimulus measures to help revive activity in the sector, which is threatening the country’s economic recovery. It accounts for a quarter of the production. ,
Home buyers wary of the uncertain economic outlook remain on the sidelines, while property developers and agents said sales were still soft after a short-term burst of activity in major cities such as Beijing and Shenzhen.
Beijing resident Daniel Song, who was given 3 million yuan ($410,043) by his parents to buy an apartment at the beginning of the year, recently abandoned the idea, worried about his income security.
“In today’s economic situation, I am not sure about the future of my career,” said the 28-year-old computer programmer.
China has stepped up the pace of policy stimulus in recent weeks amid a deepening debt crisis in the sector caused by serious liquidity problems at China Evergrande Group (3333.HK) and Country Garden (2007.HK).
But the support measures have had no notable impact among buyers still struggling with low confidence. Official data on Thursday showed that new home prices in China fell for the third consecutive month in September, down 0.2% from August, traditionally the peak period for home buying.
Separate data this week also showed that property sales and investment declined by double digits, falling by 19.8% and 18.7% respectively, a sign that the world’s second-largest economy was slower than expected. Despite better GDP, it is still not out of the crisis. data.
Andy Li, CEO of realty company Centline China, said the mostly relaxed policies have reduced purchasing costs but have done little to generate new demand.
“The overall size of the pie is still the same,” Lee said, referring to market demand. He said some September purchases were delayed compared to the previous two months due to market expectations of stimulus policies. “It will have to depend on economic recovery to make it big.”
Sales are expected to remain soft in October, developers said, as fewer visits to buyers’ sites translated into actual purchases.
An executive at a developer that runs projects in major cities said its sales during Golden Week were 20% lower than a year ago, though better than September. The person, who declined to be named because he was not authorized to speak to the media, said sales had fallen again after the holidays ended.
“At the beginning of the year, the industry expected the first half to be bad and the second half to be better. But the reality is that it’s a bad first half and the second half is even worse.”
Nomura also said it was too early to predict a decline in the property sector.
“Recent property relaxation measures may lead to an oversupply of homes, putting further upward pressure on house prices given the still sluggish housing demand. Moderate recovery in top-tier cities has been offset by lower levels of housing demand. This may continue to reduce housing demand in cities,” it said.
Sales performance varied greatly across cities, with new home prices rising month-on-month in September in Beijing and Shanghai, and falling in Shenzhen and Guangzhou. Demand remained weak in smaller cities struggling with excess supply.
S&P Global Ratings this week revised its forecast for China’s property sales to decline by 10%-15% this year to 2022, compared with a mid-single digit percentage decline in its earlier forecast. It also expects sales to decline another 5% in 2024.
“In the bad real estate market and disappointing economy, I don’t have that much desire to buy a new house, and I want to keep the money in my hands,” said Doris Dong, a 30-year-old housewife who lives in Beijing. ,
($1 = 7.3163 Chinese yuan renminbi)
Reporting by Claire Jim in Hong Kong and Liangping Gao in Beijing; Edited by Sri Navaratnam
Our Standards: The Thomson Reuters Trust Principles.
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Source: www.reuters.com
