China’s Property Market Struggles to Recover Amidst Stimulus Measures
China’s Property Market Continues to Face Challenges
China’s troubled property market is showing little signs of a recovery in the short term despite a series of government stimulus measures to help revive activity in the sector which makes up a quarter of the nation’s economic output.
Homebuyers Remain Cautious
Homebuyers, wary of the uncertain economic outlook, have remained on the sidelines, while property developers and agents said sales were still soft following a short-lived burst of activity in major cities like Beijing and Shenzhen.
Economic Uncertainty Dampens Demand
Beijing resident Daniel Song, who was given 3 million yuan ($410,043) by his parents in the beginning of the year to buy an apartment, recently gave up on the idea, concerned about his income security. “I am not sure about my career future in today’s economic situation,” said the 28-year-old computer programmer.
Stimulus Measures Yet to Make an Impact
China has quickened the pace of policy stimulus in recent weeks amid a deepening debt crisis in the sector. However, the support measures have yet to have any notable impact among buyers still grappling with low confidence. China’s new home prices fell for the third straight month in September, down 0.2% from August, a traditionally peak home buying period, official data showed on Thursday.
Challenges Ahead for the Property Market
Much of the easing policies have lowered the buying costs, but done little to create new demand. Sales in October are expected to stay soft, developers said, as few of the visits from buyers to sites have realized into actual purchases. Nomura also said it is too early to call the bottom for the property sector.
Differing Sales Performance Across Cities
Sales performance differed a lot among cities, with new home prices up on month in Beijing and Shanghai in September, and down in Shenzhen and Guangzhou. Demand remained lukewarm in smaller cities struggling with excess supply.
A Revised Forecast
S&P Global Ratings this week revised down its forecast for China’s property sales to drop by 10%-15% this year from 2022, compared to its earlier forecast of a mid-single digit percentage drop. It also expects 2024 sales to drop by a further 5%.
Buyers’ Sentiments Reflect Market Conditions
“In a bad real estate market and a dismal 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 living in Beijing.
China’s property market faces ongoing challenges despite government efforts to stimulate activity. Homebuyers remain cautious, uncertain about the economic outlook. The recent stimulus measures have yet to make a significant impact, with new home prices continuing to decline. Sales are expected to remain soft in the coming months, as buyers hesitate to make purchases. The property market’s performance varies across cities, with some experiencing price increases while others face a decline. S&P Global Ratings has revised down its forecast for property sales, reflecting the challenging market conditions. Overall, the sentiment among buyers reflects the current state of the property market, with many opting to hold onto their money amid economic uncertainty.