China’s housing sector likely to continue to underperform broader market until major change in policy – JPMorgan
REAL ESTATE STOCKS VIEWS & ANALYSIS
China’s housing sector likely to continue to underperform broader market until major change in policy – JPMorgan
REAL ESTATE STOCKS VIEWS & ANALYSIS

China’s housing sector likely to continue to underperform broader market until major change in policy – JPMorgan

 

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China’s housing sector is likely to continue to underperform the broader market due to sluggish sales, weak property prices and the risk of default by some real estate companies, until there is a major change in the country’s easing policy or the government’s attitude, said JPMorgan in a note.

There is no official data on the progress of reviving uncompleted projects and ensuring home delivery in China, but the PBOC has deployed about 400 billion yuan of rescue funds through pledged supplementary lending (PSL), it said.

Surveys showed that about 34% of uncompleted projects have been delivered, while completions in the first half of this year grew 19% from a year earlier, outperforming most other real estate indicators, the bank said.

JPMorgan believed that ensuring home delivery will remain the core policy objective of the sector in the near term, and troubled developers will therefore have more assets to dispose of to asset management companies.

The Chinese government may also provide selective financing support to non-troubled private developers to help recover capital for construction, it added.