China’s real estate market largely hit bottom, full-year sales to fall 20% – 30% – industry body

 

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China’s real estate market has largely hit the bottom, but due to high comparison base last year, it’s a high probability event that key indicators for the sector will continue to decline year over year in the next few months, said Feng Jun, chairman of the China Real Estate Association, at an industry forum on Friday.

The market showed some recovering signs in March, but due to the impacts of the economic slowdown and the Covid-19 control measures, it slipped into decline again in May before hitting a bottom in June, he said.

Property sales for the full year of 2022 is expected to decline by 20% – 30% from the previous year and real estate investment is likely to drop by about 10%, according to Feng.

Meanwhile, liquidity risk in the real estate sector is unlikely to expand further, though the transmission and extension effect of the risks will gradually appear, he said.

“Overall speaking, the scope of the liquidity risks is already clearly shown, but it’s still unknown when the follow-up ‘heavy blow’ will come,” said Feng.

For some companies, the “heavy blow” has come, but for others, it hasn’t and the transmission of the risks will gradually show, he added.

Feng said that it takes time to tell if local governments’ measures to stabilize the housing market are effective or not.

While many local governments have introduced measures to stabilize the housing markets, most are focused on boost property demand, with few measures targeting the supply side, he said.

The demand and supply in China’s real estate market is largely balanced and the demand-focused policy measures may not very effective, he added.