China’s property market continues to be in stress. Demand is yet to pick up in the sector, which accounted for about 30 per cent of China’s GDP till the failure of real estate behemoths such as Evergrande Group and Shimao Group in 2021. China is now looking to announce fresh measures.
Access to home loans is likely to be made easier for both first time buyers and those who would be interested in purchasing a second home.
Though China has been looking at a stimulus package to support economic growth, analysts opined that it may not be a “big bang” one.
South China Morning Post (SCMP) in a recent report said that China’s existing policies have failed to sustain a rebound in the property market as price slumps extend across the nation, putting the government’s 5 per cent economic growth target for the current financial year at risk.
In 2022, China announced a slew of measures including the three arrows policy—bank credit, bond issuance and equity financing, to spur consumption. Clearly, these measures have had little impact on the country’s economy.
According to Statista, a data website, the fluctuation of real estate prices is very likely to have a far-reaching impact on Beijing’s economic development; although the extremely high real estate prices in some regions of China are expected to fall, a sudden drop of housing prices would set off a chain reaction, leading to devastating consequences for the country’s future.
China’s economic problems have multiplied by its ageing population and rising unemployment rate among the youth. Beijing’s crackdown on its homegrown technology sector that hit headlines has added fuel to fire.
The dragon registered a 6.3 per cent growth in the April to June quarter-much below expectations. In the first quarter, China’s economy grew by 4.5 per cent compared to the corresponding period of the previous year.
“China’s recovery is going from bad to worse. The 6.3 per cent year on year expansion through the June quarter was below expectations and flattered by the lockdown-ravaged reference period last year,” SCMP quoted Harry Murphy Cruise, economist at Moody’s Analytics in another article.
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