BEIJING : China’s new home prices will see a deepening fall in the first half of the year before rebounding at a faster pace in 2023, according to a Reuters poll, as the scrapping of COVID-19 curbs and stimulus policies improve sentiment.
New home prices are expected to fall 1.0 per cent year-on-year in the first half of 2023, deepening from a fall of 0.5 per cent forecast for that period in a November survey, according to 13 analysts and economists polled by Reuters between Feb. 17 and Feb. 24.
For 2023, prices are expected to rise 2.5 per cent, faster than an increase of 1.0 per cent forecast in the previous poll.
Consumers’ income and expectations are recovering slowly and the housing supply is exceeding demand in small cities, said Lu Zhe, chief economist at Topsperity Securities.
“A rebound in demand will drive price improvements with the economy recovering in the second half of the year,” Lu said.
The crisis-hit property sector has been hobbled by flagging demand and mounting debt defaults with falls in sales and prices.
A tentative property sector revival was seen in January, with home prices rising for the first time in a year, boosted by aggressive government support late last year, lower mortgage rates and a U-turn on the “zero COVID” containment policy.
Demand, however, remains sluggish, and is a major constraint to a long-term rebound but analysts expect a sustainable recovery will begin towards the second half of this year.