Further stabilization expected in property sector

The latest property investment and sales data from the National Bureau of Statistics (NBS) indicate a recovery in both supply and demand, boding well for further market stabilization in the coming months, industry experts said. China’s investment in property development rose 3.7% year-on-year to CNY1.45 trillion in the first two months. Investment in residential buildings alone rose by 3.7% year-on-year to about CNY1.08 trillion. The stable real estate investment suggests the fundamentals of the property sector are stabilizing, though there remains certain pressure in liquidity, said Pan Hao, Senior Analyst with the Beike Research Institute. “In order to boost the stabilization of the property market and enhance the confidence of homebuyers, joint efforts are required by real estate developers, local governments as well as financial institutions,” Pan said.

In January and February, new property development totaled 149.67 million square meters, down 12% year-on-year, perhaps a reflection of the capital pressure on real estate developers, according to Chen Wenjing, Deputy Director of Research with the China Index Academy. In the January-February period, commercial housing sales fell nearly 10% year-on-year in terms of floor area to about 157 million sq m and declined 19% to CNY1.55 trillion in terms of value. Sales volume, however, has grown mildly compared with the same period of 2017 and 2019, showing market confidence is getting boosted, thanks to measures like local governments’ specialized policies, provident fund loans, loans from commercial banks and favorable housing policies to attract talent, Pan said.

Since the beginning of the year, many Chinese cities announced measures to stabilize their housing markets. In addition, improvements made to the financing and credit environment to support rational demand as well as property developers’ proactive offerings are creating a positive outlook for the home market in the coming months, said Yan Yuejin, Director of Shanghai-based E-house China Research and Development Institution, as reported by the China Daily.