Chinese Real Estate Projected to Experience Some Sort of Cooling
From being a red-hot economy, China's real estate sector is projected to come back to the reality that is, it is being predicted to experience a downtime in 2019. China International Capital Corp. (CICC) said much of this in a research report, reported by Cai Xin Global.
The hints are already there. China's been forced into it by the US-China war, which happened this summer. Economic growth slowed down to 6.5% from the quarter of July to September. This was, by far, the lowest it's ever been, even by the 6.6% forecast done by Reuters. QZ stated research firm Capital Economics said that it's not evident since the figures have been stable at best. But there's little doubt that the economy is cooling.
Furthermore, the cooldown experienced by the Chinese economy has shown in other factors. The stock market-notably the Shanghai Composite Index is down 25% in annual figures. Alibaba and Tencent, two of the biggest tech companies in China, have lost revenue by the billions of dollars. Even the Golden Week national holiday paled in comparison to past versions of it, where spending on everything from tech to real estate-have slowed down.
Real estate figures have shown a marked decline, slowing down to 8/9% in September. In contrast, August posted figures of 9.2%, Home sales have also shown a lull to the tune of a 3.6% measurement in the area.
China is currently facing a proverbial war on two fronts. On one front, it is facing reactions from different markets who are reeling from the effects of this latest setback, particularly contractors and developers aiming for survival. On the other, there are the effects of the US-China trade spat, but officials have already placed measures for that.
The banks have already adjusted by reducing reserve requirements. This was meant to pump more money to fire up the economy once more. However, it is believed that China won't be able to enact stimulus packages, the kind that was seen decades ago, as there are still issues to be addressed with the fallout coming from the quick growth of credit.
In China, the Mid-Autumn Festival and the National Day holidays-the latter a week-long celebration-have bought out the buyers en masse, historically. However, this year had been different. Buyers dwindled in number and real estate sales in 31 cities were reduced to the tune of 27%.