China property-market pessimists missing underlying demand, says veteran economist with track record of correct calls

Investors are too pessimistic about China’s property market, where demand for housing is still underpinned by strong sales among state-backed developers and rising rents, according to a veteran analyst who correctly predicted the reopening trade last year.

Sales by property developers with state backing have diverged from the general downtrend in the industry this year, and housing rents are also rising, Hong Hao, chief economist at Grow Investment Group, said in a report on Monday. For instance, sales at Poly Developments and Holdings Group jumped 109 per cent from a year earlier in the first seven months, and Yuexiu Property registered a 68 per cent increase in the period, he said.