Real Estate

China’s real estate slump predicted to last for years, threatening wider region

NANNING, CHINA – MAY 17, 2023 – A commercial residential property is seen in Nanning, South China’s Guangxi Zhuang autonomous region, May 17, 2023.

Future Publishing | Future Publishing | Getty Images

Weakness in China’s real estate sector could be a drag on the economy for years to come and could even impact countries in the wider region, Wall Street banks have warned.

“We see persistent weaknesses in the property sector, mainly related to lower-tier cities and private developer financing, and believe there appears no quick fix for them,” Goldman Sachs economists led by China economist Lisheng Wang said in a weekend note.

Goldman’s economists said the property market is expected to see an “L-shaped recovery” — defined as steep declines followed by a slow recovery rate.

“We only assume an ‘L-shaped’ recovery in the property sector in coming years,” they said.

Read more about China from CNBC

Read more
Real Estate

Chinese real estate recovering from slump, officials say


China’s vast real estate industry is recovering from a slump triggered by tighter debt controls, a deputy central bank governor said Friday, after a wave of defaults by developers rattled global financial markets.

Pan Gongsheng mentioned Evergrande Group, the global industry’s most heavily indebted developer, but gave no update on its government-supervised efforts to restructure 2.1 trillion yuan ($305 billion) in debt to banks and bondholders.

“Market confidence is recovering. Transaction activity in the real estate market has increased,” said Pan at a news conference ahead of the meeting of China’s legislature. “The financing environment, especially for high-quality enterprises, has improved significantly.”

Pan gave no indication Beijing planned significant changes in its debt controls, known as “three red lines.”

China’s economic growth slid in mid-2021 after regulators who worry debt levels are dangerously high blocked Evergrande and other heavily indebted developers from borrowing

Read more