China's new home demand is likely to remain well below 2017 market peak for the next few years, Goldman Sachs said. The bank suggests the world's second-largest economy faces a long property market slump.
China's real estate sector, which accounted for roughly a quarter of economic activity at its peak, entered a prolonged slump in 2021, with market sentiment hit by the difficulties of indebted developers trying to deliver homes that buyers have already paid for, the ag said. Reuters.
Demand for new homes is likely to be less than 5 million units a year, well below the 20 million-unit peak of 2017, the investment bank said.
New home prices fell in May, extending a two-year stagnation, official data showed on Monday, highlighting sector challenges despite several rounds of economic policy support.
“Our earlier estimates did not take into account that investment demand in China could turn negative as landlords sell vacant apartments, and that the government-led slum clearance in 2015-2018 should lead to fewer demolitions in the coming years,“Goldman Sachs said.
“Investment property owners are likely to be net sellers in the near term. With the government's focus shifting to urban renewal and rehabilitation rather than demolition, the average demand for housing due to demolition will decrease from 4.7 million units in the 2010s to 2.7 million units in the 2020s, the bank added.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be seen HERE