China’s property market shows first signs of potential recovery
Apr 08, 2019 (China Knowledge) - China’s property market showed is starting to show first signs of a possible recovery this year after the country’s first-tier cities saw an uptick in sales in March this year.
According to Nomura securities, contracted sales in the new homes market increased by 26% among 23-listed mainland developers in March after falling by 20% in the first two months of this year on the back of pent-up demand and reduced prices.
While this recovery is still limited to just China’s first-tier cities, the performance of these cities tends to be an indicator of wider market sentiment. In addition, sales in China’s first-tier cities are largely contributed by the secondary market with prices determined by market forces.
After years of cooling measures, there has been a build up of pent-up demand among Chinese property buyers and investors who are looking to re-enter the market after recent policy easing and quicker approval of mortgages.
However, analysts still urge caution before entering the property market as this surge may be short-lived just like last-year when the property market surged between April to May but eventually ceased.
At the same time, analysts also note that growth momentum had also tapered off towards the last two weeks of March and that the rally could have been driven by lowered property asking prices.
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