Property: Where Are We Now?

The range of expectations for China’s property sector has now adjusted meaningfully, with China’s top leadership expressing support for “reasonable” housing demand at a Politburo meeting on Monday, and the PBOC cutting banks’ required reserve ratios and relending rates. Now the focus shifts to the level of policy support Beijing will actually provide for developers and homebuyers, with the Central Economic Work Conference the next opportunity to see additional measures unveiled.

Against this more constructive view that conditions in the property industry and the economy will stabilize with more policy support and monetary easing, there are still meaningful risks given the probability of continued defaults by major developers, as well as the sharp and ongoing slowdown in property sales and construction activity.

Posted December 8, 2021
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