China property investment seen stabilising as analysts count on financing lifeline, demand to spur recovery
- In January and February, property investment declined 9 per cent year on year, less than the 9.6 per cent drop in 2023, official data shows
- Overall risk in the market is ‘manageable’ because the decline in investment is narrowing, showing the ‘supply side is stabilising’, an analyst says
Property investments and sales in mainland China continue on a downwards trajectory despite Beijing’s efforts to inject liquidity and boost demand, but the rate of decline has slowed in a sign that the market is starting to stabilise, according to analysts.
In January and February, total property investment declined 9 per cent year on year to 1.18 trillion yuan (US$164.5 billion), according to data released on Monday by the National Bureau of Statistics (NBS). Investment in residential property fell 9.7 per cent to 882.3 billion yuan.
Overall investment slid 9.6 per cent in 2023, NBS said.
“The overall risk [in China’s property market] is manageable because the decline in investment is narrowing, which is a sign that the supply side is stabilising,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.
The competitive landscape of the property industry is changing, with companies that have healthier financials taking part in more projects than their smaller peers – another positive sign that the troubled market is improving, Yan said.
“With [banks] offering stronger financing support, property investment will likely gain more momentum later,” he said.
