Developers' survey reveals silver lining
Updated: 2016-04-05 07:49
By Shen Lan(China Daily)
|
|||||||||
Developers' financing conditions appear to have improved marginally, but mainly because of the increase in sales revenues. Bank and non-bank financing access does not seem to have become easier, although funding costs have reduced marginally.
The developers we surveyed expect continued loosening of policy by the central government in the coming months. The central government has made destocking its key target this year, and implemented more measures to accelerate the digestion of property inventory, including adjustments to down-payment requirements and transaction taxes. This has exceeded market expectations to some extent and sent signals of a change in the central government's policy stance on the housing market.
However, the developers' policy outlook on local governments was neutral. At the local government level, policy divergence will likely become more obvious, with policy measures in top-tier cities aimed at managing financial risks and those in lower-tier cities aimed at expediting the destocking process. Possible policy measures that could be adopted by lower-tier cities may include mortgage loan adjustments, lower down-payment requirements, purchase subsidies, and lower hukou (China's household registration system) barriers.
Our surveyed developers believe adjustments to transaction taxes and purchase subsidies, among other measures, would be the most effective way to boost sales. But given the sudden heat in selected top-tier cities, further loosening of policy measures may be more targeted and measured.
The survey results on investment in the property sector were in line with published data, showing that investment remained weak entering 2016. Forward-looking indices, such as floor space of new starts and land purchases, showed signs of stabilizing at low levels by the end of 2015. This indicates the worst may be over. But the upside risk is also likely limited given the still high inventories. The property market policy loosened notably early this year, compared with a relatively neutral stance in 2015, as the government made clear its intention to support the market and boost demand.
We expect property investment growth to remain in the low single digit this year but see momentum improving versus negative growth as of the end of 2015. And slightly positive property investment growth in 2016 would help stabilize growth.
The author is an economist at Standard Chartered China.
- Property policy makes a comeback after 7 yrs of suspension
- Report: Profits shrink for property developers
- Shanghai reins in property market
- Minister rules out property market collapse
- Property market in big cities gets frothy amid leveraged purchase
- Crowdfunding takes root in Shenzhen property market
- China's property market picks up in November
- China's property market sees weaker price increases
- Property market shows sign of recovery as sales, volume rise
- Global health entering new era: WHO chief
- Brazil's planning minister steps aside after recordings revelation
- Vietnam, US adopt joint statement on advancing comprehensive partnership
- European border closures 'inhumane': UN refugee agency
- Japan's foreign minister calls A-bombings extremely regrettable
- Fukushima impact unprecedented for oceans: US expert
- Stars of Lijiang River: Elderly brothers with white beards
- Wealthy Chinese children paying money to learn British manners
- Military-style wedding: Fighter jets, grooms in dashing uniforms
- Striking photos around the world: May 16 - May 22
- Robots help elderly in nursing home in east China
- Hanging in the air: Chongqing holds rescue drill
- 2.1-ton tofu finishes in two hours in central China
- Six things you may not know about Grain Buds
Most Viewed
Editor's Picks
Anti-graft campaign targets poverty relief |
Cherry blossom signal arrival of spring |
In pictures: Destroying fake and shoddy products |
China's southernmost city to plant 500,000 trees |
Cavers make rare finds in Guangxi expedition |
Cutting hair for Longtaitou Festival |
Today's Top News
Liang avoids jail in shooting death
China's finance minister addresses ratings downgrade
Duke alumni visit Chinese Embassy
Marriott unlikely to top Anbang offer for Starwood: Observers
Chinese biopharma debuts on Nasdaq
What ends Jeb Bush's White House hopes
Investigation for Nicolas's campaign
Will US-ASEAN meeting be good for region?
US Weekly
Geared to go |
The place to be |