Chinas Housing and Property Sector Might be on Road to Recovery
Published By : 19 Aug 2015 | Published By : QYRESEARCH
China’s significant housing and property industry is seemingly on the path to recovery after a year of being down in the dumps. A report from CNBC has said that based on recent government numbers, monthly home prices have risen for the third consecutive month this July.
The government statistics released recently show that prices of new homes across the country had increased by 0.3 per cent in the month of July, 0.4 per cent in the month of June, and 0.2 per cent in the month of May. On an annual basis, numbers showed a 3.7 per cent drop compared to the 4.9 per cent slip in the month of June. This signals that the construction and property market is already making its way to recovery.
The real estate market in China has been waning over the past year. Even though urban areas such as Shanghai, Beijing, and Shenzhen have markets that are reportedly showing signs of recovery, lower tiered areas have been seeing large chunks of land gathering dust.
Even the central bank in China has stepped in, slashing interest rates four times over the past year. This is in addition to the other steps taken to fuel spending including lowering down payment requirements, reducing banking reserve requirements, and tax breaks for home buyers.
Even after all these steps, the increased inventory in the secondary cities is restraining complete recovery of the industry, based on a report by Reuters. China Vanke, the biggest property developer in the country said that even though the housing sector is stepping out of the year long slump, it will take much longer to fully recover from it.
Yu Liang, president of China Vanke said that the number of land acquisitions has dropped and inventory is very gradually being digested. Even though the recovery will take time, it is definitely on the road.