Trends and Predictions for China’s Housing Market in 2016

Authored by Jia Yizhen and Deng Yang

China property bubble becomes a hot topic again. After the downturn in real estate market in 2014, the government started to loosen the monetary policy and ease restrictions on the property market. House prices and sales in China is recovering and booming again.

Sales Prices of Residential Buildings in 70 Medium and Large-sized Cities in Sep 2016

From the map we could see that in September 2016, there are 14 cities with month-over-month gains of over 2%. Among the rest of the cities, there are 40 cities with month-over-month gains of 2% or below, 6 cities whose month-over-month sales prices of residential buildings decreased and 1 city remained the same month over month. As to year-over-year changes, there are 14 cities with gains of over 10% and 42 cities with gains of 10% or below. There are 6 cities’ year-over-year sales prices of residential buildings decreased. The lift of house sales prices has been driven largely by big cities. We could predict that the sales in property market will still grow but the housing market is cooling down.

In 2016, the investment in residential buildings still focuses on housing below 90 square meters. Relatively the investment in villas and high-grade apartments is the smallest and the most stable. In general, the investment in residential buildings remains stable in 2016 except that in housing below 90 square meters in May rises significantly. In comparison with house prices and sales, the investment is cooling down and more stable.

 

The supportive monetary policies encouraged the market and it start to boom again. It can also be seen from sources of funds of enterprises for real estate development that the positive loan policy affected the lift of the sales. And we could predict that the policies and measures will be further supportive the next few years. The house sales are generally rising up significantly but it’s also very shaky. There still remains a risk of overheating.

 

Sources for data in this article:

National Bureau of Statistics

Reference:

The Wall Street Journal:

http://blogs.wsj.com/briefly/2015/12/23/5-predictions-for-chinas-housing-market-in-2016/

Financial Times:

https://www.ft.com/content/4e5f352a-450c-11e6-b22f-79eb4891c97d

 

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