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Beijing: ChinaThe property sector shrank further in November with a fall in prices, sales and investment, partly as COVID-19 restrictions hit demand, although recent pro-market policies and the easing of COVID restrictions have buoyed the outlook.
Analysts expect sentiment to recover gradually over the next year, as relaxations in COVID restrictions and asset support policies take effect.
“The market downturn this year has deepened due to factors such as a pullback from the previous high growth cycle, risk aversion from property firms and continued disturbances from the outbreak of the pandemic,” said Liu Lijie, an analyst at Beic Research Institute. ,
New home prices fell 0.2% from October, the fourth straight decline, and fell 1.6% from a year earlier, the seventh on-year drop, according to Reuters calculations national bureau of statistics (NBS) data.
Property investment fell the most sharply since the statistics bureau began compiling data in 2000, down 19.9% in November, following a 16% drop in October, the NBS said in a statement.
Some Chinese cities imposed lockdowns in November to try to stem the coronavirus outbreak, further denting already sluggish demand. Chinese authorities have increased financial support for developers in recent weeks, the latest move to encourage home purchases.
These policies provide some respite from the crackdown on excessive leverage in mid-2020, which prompted cash-strapped developers to default on debt obligations and stalled construction. Homebuyers responded by boycotting mortgage payments.
Policymakers plan to expand domestic consumption and investment, including supporting citizens’ “reasonable” demand for housing while curbing speculative investment, Xinhua news agency said on Wednesday.
Beike’s Liu predicts that housing demand will gradually release in 2023 as consumer sentiment improves with progress in housing delivery.
The recent easing of COVID-related restrictions by Beijing is also widely expected to benefit the property sector, as the country moves away from a zero-Covid policy that saw an economically disruptive lockdown and mandatory quarantine at government facilities. Had demanded
Thursday’s data showed that property sales declined by double digits for the ninth consecutive month.
While markets applauded the easier policies, which were expected to boost economic growth in the longer term, some analysts say fragile aggregate demand will keep the property sector recovery slow.
Analysts at Goldman Sachs said in a note, “Given the challenging demographic trends and policymakers’ long-standing stance that ‘housing is for living, not speculation’, we maintain our view that The recovery of the property sector should be gradual and bumpy.” ,
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