China housing analysts call for more stimulus as July sales plunge and report predicts 17 per cent slump through 2025

Economists and experts predict at best an ‘underwhelming’ recovery for the US$2.7 trillion sector this year after early July sales fell 45.2 per cent

Even if the current pace of recovery continues, national sales may only return to last year’s level in September or October, an analyst says

Reading Time:2 minutes

Country Garden Holdings’ Fengming Haishang residential development in Shanghai on July 12, 2022. New home sales in China plunged in early July. Photo: Bloomberg

Published: 2:00pm, 14 Jul 2022

Housing demand in China will slump over the next five years, according to a new report, as plunging home sales in early July signal at best an “underwhelming” recovery for the sector, analysts warn.

Overall property demand will decline 17 per cent to 7.8 billion square metres from 2021 through 2025, compared with 2016 through 2020, according to according to Beike Research Institute, the research arm New York and Hong Kong-listed of KE Holdings.

The projection echoes recent alerts by economists and analysts who foresee a bumpy ride ahead for China’s 18.2 trillion yuan (US$2.7 trillion) property market, which could continue to endanger the nation’s economic growth target of around 5.5 per cent this year.

For example, Citic Securities on Wednesday noted an “unstable” recovery of the sector given unresolved credit risks for home builders. The company called for more easing policies to buoy sales.

A construction site of a residential building in Dalian, Liaoning province, China on September 16, 2019. Delays in deliveries of housing units to buyers have damaged confidence in the market, analysts say. Photo: Reuters

In early July, new home sales fell 45.2 per cent to 59,000 units, following an 11.2 per cent drop in June and a decline of close to 46 per cent in May, according to the securities firm.