Despite various government stimulus efforts, China’s housing market is still struggling to find stability. JPMorgan economist, Haibin Zhu, believes that the market crash is far from over and predicts that home prices will not see any significant stabilization until 2025 at the earliest.
Current Market Trends
Recent data released by China Index Academy indicates that the average price for new home sales in 100 Chinese cities has only risen by a meager 0.11% from the previous month, showing a continuous slowdown from the previous month’s data. Moreover, resale home prices have actually declined by 0.71% from the previous month. Year over year, both new and resale house prices have taken a hit, dropping by 1.76% and 6.89% respectively.
In an attempt to stimulate the housing market, China is considering a plan to lower homeowner borrowing costs through mortgage refinancing. However, analysts like Winnie Wu from BofA Securities are skeptical about the effectiveness of this measure. While some believe that it could boost consumption, Wu points out that it could also lead to banks reducing deposit rates to protect their margins, ultimately affecting interest income on household savings. JPMorgan’s Zhu also believes that this measure would not significantly impact new home demand.
The challenges facing China’s housing market are multi-faceted. Despite numerous support measures and stimulus efforts, the market continues to face difficulties. The impact of these struggles is evident in the declining prices and overall sentiment towards the housing sector. As the country navigates through these challenges, it will be crucial to closely monitor the effectiveness of proposed solutions and their impact on the market as a whole.
The road ahead for China’s housing market is paved with uncertainties. While efforts are being made to revitalize the sector, the current softness and challenges suggest that a significant turnaround may still be a few years away. As stakeholders monitor the market’s progress, it will be important to remain vigilant and adaptive to the changing landscape of China’s housing market.