Chinese housing market will march downward this year

07 January, 2019
Chinese housing market will march downward this year
The Chinese housing market has peaked and will experience a downturn in 2019, said Ye Aoxing, a senior director of Standard & Poor’s enterprise rating department who focuses on the real estate sector in Greater China, Investor Journal reported on Monday.

Ye expects sale prices to fall by up to 5% this year, and the sales area will decrease by 3% to 7%, resulting in an 8% to 12% reduction in the total value of house sales.

In this harsh environment, small real estate developers will withdraw from the market and resell their abandoned projects to large developers in exchange for cash, Ye said. Leading housing enterprises will take advantage of the situation to grab more market share.

Ye also thinks that current housing market regulation is unlikely to be further relaxed nationwide. But it is possible that some provinces will gradually relax the purchase limit.

Though the authority will accommodate some financing demands from real estate developers, it will not broaden the financing channel for developers to stimulate the property market. It would be risky to increase  leverage in the industry, said Ye.
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