New | China’s new mantra - eliminating the housing glut
Destocking the new buzz word for Chinese leaders
Location, location, location. It is the mantra everyone knows in property investment.
Destocking, destocking, destocking. The top leaders in China have repeated it more than three times in the past month.
The message has got across: Selling down property inventories is one of the top priorities for policymakers next year.
And UBS chief China economist Wang Tao explains why: “Only once property volume construction activity stops sliding and more progress has been made in closing down excess capacity and non-viable enterprises will China’s economy be able to stabilise on a more sustainable basis.”
But the government is yet to fully map out how it is going to help developers sell down a record pile of 697 million square metres of unsold properties as of the end of November. That amount is more than the country’s full-year property sales back in 2006, when the economy grew 12.7 per cent. Now the world’s second-largest economy is struggling to hit annual growth of 7 per cent.