The property market has appeared puzzlingly resilient amidst broader weakness in China’s economy this year and tighter credit conditions for the sector specifically. Developers responding to funding pressures are apparently prioritizing faster turnover in an effort to recover cash quickly, boosting headline starts and sales. Investment has declined so far this year, but may pick up in Q4 as monetary easing transmits to the real economy. Most importantly, increased supply, tighter credit conditions, and continuing controls on property demand may finally result in a sustained decline in housing prices nationwide.
