It’s too soon to say, but it’s possible that this year we will have reached the long-overdue turning point in the Chinese real estate market. Because prices in speculative market are extremely self-reinforcing in...
ft.com/content/ac389a… via @financialtimes
ft.com/content/ac389a… via @financialtimes
...either direction and so cannot stabilize, once expectations of steadily rising prices are credibly undermined, buyers stop buying, and may even begin to sell, and as this drives down prices, it unleashes further selling. This is especially a problem in a real estate market...
...in which over one-fifth or all apartments are empty. Beijing has been worried about soaring real estate prices for over a decade, and has tried to implement measures to stabilize prices, but the threat of falling prices has always caused it to pull back.
The question for...
The question for...
...me – and it’s still too early to say – is whether the one-two combination of the shock of Covid-19 on economic confidence and the collapse in real estate buying makes Chinese households reluctant to take on debt to purchase more apartments, and so will have finally broken...
...the Chinese belief that the price of urban real estate can only rise. If so, we may begin to see real estate prices begin to decline, and although Beijing will almost certainly take steps to halt the decline – including, if it gets bad enough, making it very hard to sell...
...an apartment – this time those steps might not be enough.
