China’s new home prices fell again in January, and existing home sales fell further, the steepest decline in nine years.
The latest unfortunate figures suggest that the Chinese government’s efforts to revive its volatile real estate market have not been successful, with some of China’s biggest real estate companies still on the brink of bankruptcy. ing.
of wall street journal (WSJ) Friday Broken According to the latest statistics from China’s National Bureau of Statistics, the price of new houses in January fell by 1.24% compared to the same month last year, while the price of existing houses fell by 4.4%. Prices continued to fall in December, but the trend is accelerating.
“Real estate has long been a popular investment for Chinese people, and a slowdown in the sector has far-reaching implications. Consumer confidence is near its lowest level in more than 30 years, according to a government survey.Economy The country is suffering from deflation, slowing exports and curbs on investment by private companies. WSJ observed.
The real estate crisis is particularly troubling because China’s real estate market grew to enormous size during the boom years. Small investors have come to believe that real estate is one of the safest investments, and young professionals have come to believe that they need a place to live in order to move to fast-growing cities.
Furthermore, because China’s local governments derive much of their revenue from real estate taxes and fees, the real estate collapse has left local governments with large amounts of debt, perhaps as much as $11 trillion. Lenders also fell into debt as high-flying real estate developers favored it. china evergrande Suddenly he was unable to repay his debts and fell into bankruptcy.
“According to a private survey, China’s 100 largest developers recorded a significant slump in new home sales in January. Home sales totaled $32.8 billion, down 34% year-on-year and the worst since at least July 2020. “It was sold in the month of 2018.” WSJ The report cited data from China Real Estate Information.
In the past, the Chinese government has tried to deregulate home purchases, funnel billions of dollars into new real estate projects from trusted “whitelist” developers and lower lending rates. None of this had the effect of reversing the recession, perhaps because homebuyers had become so nervous that low-interest loans alone were no longer enough to entice them to buy. Many Chinese home buyers are stuck paying their mortgages. never actually built.
A little less depressed analysis Bloomberg News on Thursday found some indicators that home price declines are slowing in some markets, particularly in the capital Beijing, major regional business centers and cities known for attractive vacation homes. Ta.
The government is moving ahead with an aggressive plan to sell off troubled housing projects by troubled developers like Country Garden Holdings at a discount. favorable The International Monetary Fund (IMF) believes it is worth losing some of its value to limit the huge risks of Chinese real estate.
At least one analyst, Yan Yujin, research director at the Ehouse China Research and Development Institute, happily predicted that “the worst of housing price declines may be over.” Most of the analysts interviewed were WSJ, However, we expect the deterioration trend to continue through 2024.
The fall was modest, with the IMF predicting that real estate investment could fall by up to 60% below 2022 levels before a gradual recovery begins. Almost all foreign analysts believe that the Chinese government needs to take stronger measures to save real estate. The IMF proposed “further market-based adjustments in house prices,” “rapid restructuring of insolvent developers,” and the removal of rules that allow banks to avoid recognizing bad loans to real estate developers.
The IMF added: “Insuring homebuyers against the risk that developers are unable to complete the homes they purchase could help restore confidence in developers and reduce sales pressure.” , addressed persistent fears among Chinese home buyers that they would be saddled with huge loans for houses and apartments. You can never live there.
IMF I have written A December report found that the job market is cooling and the population is so large that people are less willing to flock to big cities, with “basic demand for new homes” expected to rise by 35% over the next 10 years. It is predicted to decrease by 55%. Sell “unfinished or vacant properties.”
China’s IMF representative, Zhang Zhengxin, rejected the report, insisting that “a significant decline in housing demand is very unlikely.”
