Moody’s said on Thursday it expects a lengthy recovery process for the sector amid lingering concerns that developers would struggle to complete projects as well as due to a slowing economy and high unemployment.
John Lam, head of China and Hong Kong property at UBS Investment Bank Research, expects more easing measures to be announced soon, but still sees property transactions dropping by about 15 per cent in the second half of the year and by another 10 per cent in 2024.
“Country Garden’s evolving credit event may exacerbate weakness in homebuyers’ sentiment” Fitch Ratings said in a note, adding the impact would be larger in smaller cities.
“NOT ATTRACTIVE”
In Shenzhen and Guangzhou, people who have fully repaid their last mortgage or sold their homes are now eligible for smaller down payments and lower interest rates when they make a new purchase.
For Shenzhen homeowner Tina Zhuo, the new policy is “not attractive” as she does not want to sell her current home in what she calls “a buyers’ market”.
“I’m earning less so I don’t want to risk looking for a better property,” she said.
State-owned company employee Chen Yibo does want to sell his apartment in the smaller southern city of Nanning and buy a more expensive one in Guangzhou, where he works, but he is not finding any buyers.
Without making that sale, he cannot afford to buy. “Even the smaller down payment is too much for me,” he said. “Only lower house prices and subsidies will work for me.”
Wu, the pharmaceuticals worker, was last shown a flat selling for 1 million yuan (US$137,697) less than the average price in that district.
“I was told that the price could be lowered by another 200,000 yuan, but we don’t dare to buy it,” she added.
Source: CNA
