Across The Border | China’s red-hot property market drives growth, for now
Chinese banks extended a record 636 billion yuan (HK$763.2 billion) in new loans to households in March
A cyclical recovery in the Chinese economy seems to be underway, building on surging property prices and stronger construction activity. However, concerns are mounting whether the current credit expansion and property investment can be sustained, with some analysts even suggesting this rebound may not last long.
China’s property prices rose sharply in March, as new home prices were higher compared to the previous month in 62 out of 70 major Chinese cities, the highest proportion in more than two years, according to recent data from China’s National Bureau of Statistics.
Property sales of 37 major Chinese developers, including China Vanke and Poly Real Estate, rose an average 111 per cent in March from a year earlier, and were up 107 per cent from the previous month, according to research by Standard & Chartered.
“We have no doubt that we can brace for a fresh bout of headlines discussing the ‘return’ of Chinese property price bubbles and unsustainable debt levels,” said Annette Beacher, chief Asia-Pacific macro strategist for TD Securities.
The buoyant property market, supported by loose monetary policy, are helping to stoke up growth in what would otherwise be a faltering Chinese economy, according to analysts.