Housing prices in 10 cities projected to drop
Ten Chinese cities’ housing prices may drop in the next three months, according to a monthly analysis of China’s housing market development.
The cities in question are Beijing, Tianjin, Langfang, Baoding, Zhangjiakou and Cangzhou in North China and Qingdao, Jinan, Yantai and Weihai in East China.
This is merely a short-term housing price prediction of three months, and doesn’t mean that the price will witness an overall decline for all of 2020, said Zou Linhua, head of the housing big data project team at the Chinese Academy of Social Sciences’ Institute of Financial and Economic Strategy, told National Business Daily.
Another 10 cities are predicted to experience an increase in housing prices in the next three months. These cities include South China’s Shenzhen, Dongguan, Zhuhai and Huizhou and East China’s Suzhou, Nantong, Wuxi and Ningbo.
The housing market in key Chinese cities will be restrained and then stabilize in 2020 and is expected to achieve a soft landing in these cities, as opposed to a hard landing, which is characterized by sharp ups and downs, the report said.
A “soft landing” in housing prices refers to a decline and then a stable status afterwards, Zou said.
One reason for the short-term decline of housing prices is a drop in economic growth which weakened the momentum of urbanization. GDP growth fell to 6 percent year-on-year in the third quarter of this year and urban cities became less attractive, which affected some residents’ short-term confidence in the property market.
Another reason is the rise in third- and fourth-tier cities may depend on an increase in hidden local debt. In this round of the real estate cycle, housing prices continued to increase for a long time with a huge overall rise. Decrease of housing prices in more third- and fourth-tier Chinese cities indicates the end of the boom in the property sector, which started at the end of 2015.
Despite the slowdown in economic growth, there are still internal drivers for economic growth and housing prices still have some support, the report said.