China’s property market woes expected to worsen in 2022

Author of the article: Reuters Liangping Gao and Ryan Woo BEIJING — China’s property market woes are likely to worsen this year with prices remaining flat and sales and investment falling further, while tighter and widespread COVID-19 curbs weigh on still fragile demand despite more policy easing. The property market, a pillar of the world’s…
China’s property market woes expected to worsen in 2022

Author of the article:

Reuters

Liangping Gao and Ryan Woo

BEIJING — China’s property market woes are likely to worsen this year with prices remaining flat and sales and investment falling further, while tighter and widespread COVID-19 curbs weigh on still fragile demand despite more policy easing.

The property market, a pillar of the world’s second-largest economy, was weakened by a government clampdown on excessive borrowing from developers last year.

Since the beginning of this year, over 100 cities have taken steps to boost demand via cuts in mortgage rates, smaller down-payments, and subsidies.

The outlook for the property market is expected to remain bleak in the first half of the year and for the whole of 2022.

Average home prices are estimated to fall 1.3% on year in the first half, according to a Reuters survey of 13 analysts and economists conducted between May 16 and May 23. That compared with a 1.0% fall in a Reuters poll in February.

For the full year, home prices are likely to be flat versus a forecast 2.0% rise in the previous poll.

“The current national housing inventory is in a high phase, and tier-three and four cities face large de-stocking pressure” due to demand slowing, said analyst Ma Hong at Zhixin Investment Research Institute.

“The turning point of home prices is likely to be in the third quarter, and home prices in tier-one and two cities may be the first to rebound.”

Analysts are also more pessimistic about housing demand and supply than in the last Reuters survey.

For demand, property sales are seen slumping 25.0% in the first half, widening from a 14.0% fall in February’s poll. Sales are expected to decline 10.0% for the full year.

Investment by real estate firms is expected to fall 5.0% in the first half and drop 2.5% for the whole year. Analysts previously forecast investment would drop 2.0% in the first half and gain 1.5% in 2022.

The gloomy outlook for property prices, sales, and investment was mainly due to frequent COVID-19 outbreaks.

The Chinese capital Beijing extended work-from-home guidance for many of its 22 million residents after the suspension of all dine-in services and indoor gyms, while Shanghai plans to lift a two-month lockdown in the first half of June.

The epidemic has had an impact on Shanghai’s property market, as developers and agents suspended offline operations and many residents were under quarantine, triggering a big fall in home sales, said analyst Wang Xiaoqiang at property data provider Zhuge House Hunter.

China on Friday reduced its benchmark reference rate for mortgages by an unexpectedly wide margin, a few days after a cut in mortgage loan interest rates for some home buyers, in a push to prop up its property market.

Analysts said authorities should introduce more policies targeting the supply side to restore market confidence.

Only nationwide measures to relax curbs on financing for real estate enterprises and steps like shantytown redevelopment projects can stabilize the property market, said Liu Yuan, a head of research at China’s biggest property brokerage Centaline.

(For other stories from the Reuters quarterly housing market polls:) (Reporting by Liangping Gao and Ryan Woo; Additional Reporting by Shuyan Wang and Jenny Su; Editing by Sonali Desai)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Mexican peso leads Latam FX higher as Omicron concern ebbs
Read More

Mexican peso leads Latam FX higher as Omicron concern ebbs

Author of the article: Most Latin American currencies steadied on Tuesday, supported by an easing of concerns about the Omicron variant and a calmer dollar, while Mexico’s peso led gains as the country’s stock index hit record highs. MSCI’s index of Latin American currencies inched 0.3% higher, in a fifth consecutive session of gains. Latam…
Transaction in Own Shares
Read More

Transaction in Own Shares

Author of the article: Transaction in Own Shares 16 August 2022 • • • • • • • • • • • • • • • • Shell plc (the ‘Company’) announces that on 16 August 2022 it purchased the following number of Shares for cancellation. Aggregated information on Shares purchased according to trading venue:…
Shares in Iveco indicated at 11 euros each in market debut
Read More

Shares in Iveco indicated at 11 euros each in market debut

Author of the article: MILAN — Shares in Iveco failed to start trading at open in Milan on Monday, and were indicated at 11 euros each following the demerger from parent company CNH Industrial. (Reporting by Giulio Piovaccari; editing by Valentina Za) Advertisement This advertisement has not loaded yet, but your article continues below. Financial…