BEIJING- China’s property market woes are likely to worsen this year with prices remaining flat and sales and investment falling further, while tighter and widespread COVID-19 curbs weigh on still fragile demand despite more policy easing.
The property market, a pillar of the world’s second-largest economy, was weakened by a government clampdown on excessive borrowing from developers last year.
Since the beginning of this year, over 100 cities have taken steps to boost demand via cuts in mortgage rates, smaller down-payments, and subsidies.
The outlook for the property market is expected to remain bleak in the first half of the year and for the whole of 2022.
Average home prices are estimated to fall 1.3 percent on year in the first half, according to a Reuters survey of 13 analysts and economists conducted between May 16 and May 23.
That compared with a 1.0 percent fall in a Reuters poll in February.
For the full year, home prices are likely to be flat versus a forecast 2.0percent rise in the previous poll.
“The current national housing inventory is in a high phase, and tier-three and four cities face large de-stocking pressure” due to demand slowing, said analyst Ma Hong at Zhixin Investment Research Institute.
“The turning point of home prices is likely to be in the third quarter, and home prices in tier-one and two cities may be the first to rebound.”
Analysts are also more pessimistic about housing demand and supply than in the last Reuters survey.
For demand, property sales are seen slumping 25.0 percent in the first half, widening from a 14.0 percent fall in February’s poll. Sales are expected to decline 10.0 percent for the full year.
