China home sales set to disappoint in January, could fall by up to 15 per cent in 2024, CGS-CIMB Securities says
- Home sales in 30 major cities have dropped by 38 per cent in the first three weeks of this month, financial brokerage says
- British bank Barclays says contraction in property sales could be wider after falling by 40 per cent year on year in the first half of January
Home sales in 30 major cities tracked by Chinese financial data provider Wind have dropped by 38 per cent month on month and 10 per cent year on year in the first three weeks of this month, according to analysis by financial brokerage CGS-CIMB Securities.
In China’s tier-two and tier-three cities, homes sales are expected to log a decline of 42 per cent for the whole of January, compared with last month, with the new homes market suffering the biggest losses, CGS-CIMB said. Tier-one cities, meanwhile, might record a 21 per cent month-on-month slide despite recent easing policies.
“These estimates – if realised – imply that the China property sector could approach our bear market scenario, in which we estimate that property sales in China could fall 10 to 15 per cent this year, versus an initial base case of an about 5 per cent decline,” said Raymond Cheng, CGS-CIMB’s managing director.
The CGS-CIMB forecast also includes an annual drop of 3 to 5 per cent in home prices this year and annual industry sales of between 8 trillion yuan (US$1.1 trillion) and 9 trillion yuan, down 55 per cent from a peak in 2021.
