In this video we discuss the outlook for China's property market, real estate fixed asset investment, and the implications for commodities.
The video focuses on a topic from a recent edition of the Weekly Macro Themes report.
The discussion focuses on how property prices in China have gone from bust to boom, and the boom now looks to be maturing. The leading indicators we track suggest price growth will decelerate in the coming months and that could culminate in a property market downturn into 2018. Historically the pattern is that slower property price growth or a downturn in property prices would lead to slower or even contracting real estate fixed asset investment growth, which would at the very least cap upside for commodities and in the worst case would send base metals to new lows.
Given the importance of property for China's economic and risk outlook, and commodity demand implications, Chinese property prices should be front of mind for investors.