Thursday, October 3, 2024
HomeNewsIndustry NewsChina's property sector shrank further in November 2022

China’s property sector shrank further in November 2022

New home prices fell 0.2% from October, the fourth straight decline, and by 1.6% from a year earlier, the seventh on-year drop, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

China’s property sector shrank further in November, with falls in prices, sales and investment, partly as COVID-19 restrictions hit demand, although recent market-supportive policies and the easing of COVID curbs have burnished the outlook.

Analysts expect sentiment to recover gradually next year, as the relaxation of COVID restrictions and property support policies take effect.

“The market downturn this year, a pullback from the previous high growth cycle, has deepened due to a hit by factors such as risk spillover from property firms and frequent disturbances from the epidemic outbreaks,” said Liu Lijie, an analyst at Beike Research Institute.

New home prices fell 0.2% from October, the fourth straight decline, and by 1.6% from a year earlier, the seventh on-year drop, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Property investment fell the fastest since the statistics bureau began compiling data in 2000, down 19.9% on year in November after a 16% slump in October, the NBS said in a statement.

Some Chinese cities imposed lockdowns in November to quell coronavirus flare-ups, further denting already sluggish demand. Chinese authorities in recent weeks stepped up financing support for developers, the latest in a slew of steps to stimulate house purchases.

These policies provide some relief from a crackdown on excessive leverage in mid-2020 that pushed cash-strapped developers to default on debt obligations and halt construction. Homebuyers responded by boycotting mortgage payments.

Policymakers have set out plans to expand domestic consumption and investment, including supporting citizens’ “reasonable” demand for housing while curbing speculative investment, the official Xinhua news agency said on Wednesday.

Beike’s Liu predicted housing demand will be gradually released in 2023 as consumer sentiment will improve with a progress in housing delivery.

Beijing’s recent easing of COVID-related curbs is also widely expected to benefit the property sector, as the country pivots away from a zero-COVID policy that demanded economically disruptive lockdowns and mandatory quarantine in government facilities.

Thursday’s data showed property sales falling by double digits for the ninth month in a row.

Although markets cheered the easing policies, which are expected to boost economic growth in the long term, some analysts say fragile overall demand will keep the property sector’s recovery gradual.

“Considering the challenging demographic trend, and policymakers’ long-held stance that ‘housing is for living in, not for speculation’, we maintain our view that the property sector recovery should be gradual and bumpy,” Goldman Sachs analysts said in a note.

RELATED ARTICLES

Most Popular

Hot News