BEIJING : Prices of new homes in China are now expected to climb 3 per cent this year after a slew of policy measures to support the country’s beleaguered property market, up from earlier expectations for prices to be flat, a Reuters poll showed.
But the poll of 11 economists, conducted Nov. 20-28, also showed expectations for 1 per cent growth in new home prices in 2024 were little changed from an August poll. Economists said more measures from authorities are needed.
Defaults on debt payments by many developers in China’s cash-squeezed and highly indebted property sector have sparked fears of a broader financial crisis, weighed on consumer confidence and hindered economic growth.
Authorities, particularly those in major cities, have embarked on a string of steps to bolster demand, including allowing smaller down payments, easing curbs on home buying such as the number of homes that can be bought, lowering borrowing costs and encouraging the extension of loans.
But most analysts believe these actions must be complemented by stronger fiscal and monetary action.
“There is still room for easing property policies in major cities in 2024 … The market in first and second tier cities will continue to outperform third and fourth cities next year, ” said Huang Yu, an analyst at real estate research firm China Index Academy.
Estimates for home unit sales for 2023 were revised down to an 8 per cent slide compared with predictions of a 5 per cent drop in August, the poll also showed. Economists also expect declines next year, predicting a 5 per cent fall.
“The key reason is that homebuyer confidence has not yet been fully rebuilt,” said Wang Xingping, a senior analyst at Fitch Bohua.
According to the poll, property investment is expected to slump 10 per cent in 2023 and then 8.4 per cent in 2024.
Regulators are drafting a list of 50 property developers eligible for a range of financing support, including Country Garden and state-backed China Vanke, Bloomberg reported last week.
(For other stories from the Reuters quarterly housing market polls)