Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China property market to keep cooling into H1 2022 on tight curbs: Reuters poll

EconomyDec 02, 2021 03:45AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Under-construction apartments are pictured from a building during sunset in the Shekou area of Shenzhen, Guangdong province, China November 7, 2021. REUTERS/David Kirton

By Liangping Gao and Tony Munroe

BEIJING(Reuters) - China's property downturn is expected to continue into the first half of 2022, with home prices and sales falling as tight credit policies and a looming property tax dampen demand, a Reuters poll showed.

The property sector, a key driver of growth in the world's second-largest economy, has slowed sharply in recent months, with sentiment shaken by tight regulations and a growing liquidity crisis that has engulfed some of the country's largest and most indebted developers.

Forecasts for home prices and property investment were gloomier than the last poll in August.

Average home prices are estimated to fall 1.0% in the first half of 2022, according to 14 analysts and economists surveyed by Reuters from Nov. 26 to Dec. 1.

For 2021, home prices are now expected to rise 2.6%, down from a forecast of 3.5% in the last poll and following a gain of around 4.9% in 2020.

"The downward trend in home prices has emerged" due to tight quotas on home loans, worries about a property tax and weak demand, said Chen Shen, an analyst from Huatai Securities.

On the demand side, property sales by floor area are forecast to slump 16% in the first half of 2022, compared with a 27.7% rise in the same period this year.

The expectation for the supply-side is also gloomy, with property investment seen dropping 3.0% in the first six months of 2022, versus a 15% rise in the first half of this year.

Rapidly deteriorating conditions in the property sector have prompted speculation that policymakers may start to dial back tough restrictions on buyers and developers and even cut interest rates if economic growth falters too sharply.

But most China watchers expect authorities to largely stick to curbs for now, even as they fine-tune regulations, including marginal loosening of credit policies.

"Cities will relax restrictions on purchases, sales, loans and curbs on lowering selling prices according to local conditions", said Zhao Ke, an economist at China Merchants Securities.

Policymakers recently made some tweaks to help genuine home buyers and some local authorities have moved to ease a financial crunch at developers.

Chengdu, in the south west of China, last week issued a notice to ensure developers receive funds from presold properties and fresh loans.

Among the 14 interviewees, four expect pilot testing of a property tax to be expanded to some wealthy cities, such as Shanghai and Shenzhen, by the end of this year at the earliest, and eight think they will be introduced in 2022.

As for how a property tax would affect home prices? Most people think it depends on the tax rate, though it is expected to rein in soaring home prices in the short term.

"New homes may see a phased fall in prices and sales by volume" following the announcement of the list of cities implementing real estate tax testing, said Huang Yu, vice president of China Index Academy, a Beijing-based property research institute.

"That may increase supply and reduce speculative buying, piling downward pressures on home prices," Huatai Securities' Chen said.

Most agree that property will be more affordable over the next two and three years under President Xi Jinping's "common prosperity" campaign and the government slogan "houses (are) for living in, not for speculation".

(For other stories from the Reuters quarterly housing market polls: ) (This story refiles to add byline. Text unchanged)

China property market to keep cooling into H1 2022 on tight curbs: Reuters poll
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email