Recent real estate policies able to stabilise China’s property market; home prices in 1st/2nd cities to stop QoQ drop in Q4 – Citic Securities
Recent real estate policies able to stabilise China’s property market; home prices in 1st/2nd cities to stop QoQ drop in Q4 – Citic Securities

Recent real estate policies able to stabilise China’s property market; home prices in 1st/2nd cities to stop QoQ drop in Q4 – Citic Securities

 

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Several Chinese regions have recently intensively released housing market policies, including using home ownership instead of mortgage records for recognizing first-home qualification and lowering downpayment requirements for first-home buying.

Given the policy relaxation, the real estate market in more regions will gradually bottom out, home sales will gradually move towards recovery within this year and the average selling price in first- and second-tier cities is expected to stop falling quarter over year in the fourth quarter, Citic Securities said in a note. 

The policies will be able to stabilize China’s property market, it said. In the short term, the persistent decline in housing prices should be curbed, and in the medium to long term, the construction of subsidised housing and the redevelopment of urban villages are expected to inject new momentum into the market, and property developers are expected to gain new room for business development, Citic said.

This is the moment when the downward cycle hits the bottom and the starting point for the real estate sector to move towards a new model of sustainable development, it said, adding that the sector’s recovery is expected to start in September.

Citic is bullish on leading companies in terms of resources, creditworthiness and capabilities, recommending China Resources Land, and Yuexiu Property. For property managers, Citic is bullish on Onewo, China Resources Mixc Lifestyle, China Overseas Property and Yuexiu Services.