China's real estate crisis, caused by a crackdown on risky behavior by home builders and a subsequent housing slowdown, is spreading to the broader economy, leading to sinking sales, disappearing jobs, and a decline in consumer confidence, business investment, and stock markets.
Canada's housing market is seeing a surge in new listings, with a 5.6% increase in July, indicating a possible shift in sentiment among homeowners, while home sales have declined due to higher mortgage costs and interest rates. However, prices continue to rise, although at a slower pace.
China's real estate market is experiencing a significant downturn, causing major developers to face massive losses and mounting debts, which is impacting the country's economy and global growth.
China's property market is seeing strong sales and rising rents, indicating a continuing demand for housing that pessimists are missing, according to veteran economist Hong Hao.
China's largest private real estate developer, Country Garden, is in financial trouble, missing bond payments and posting a record loss, signaling further concerns about the country's property sector as housing prices and foreclosures continue to rise, while other economic indicators, such as industrial output and retail sales, fall short of expectations; these developments are raising concerns about the overall health of China's economy and its future growth prospects.
New home sales in the US increased by 4.4% in July, outperforming expectations and highlighting the continued demand for new construction due to a shortage of existing affordable homes. Despite rising mortgage rates, buyers are turning to new homes, causing a decline in sales in the resale market. However, as mortgage rates continue to rise, builder sentiment may be negatively impacted and prices may need to be adjusted to attract buyers.
China has introduced new mortgage policies to boost its property market and stimulate economic growth by allowing more people to be classified as first-time homebuyers and receive lower mortgage rates.
China's new home prices are expected to show no growth in 2023, reflecting the pressure on the crisis-hit property sector and the need for policymakers to restore confidence in the economy.
Pending home sales in the US rose by 0.9% in July, marking the second consecutive month of growth, despite high prices and increasing mortgage rates, with the rise attributed to an expanding job market and the potential for further increases given the number of failed offers; however, year-over-year pending transactions fell by 14%.
Consumer spending in China rebounded in August, with all categories, including apparel, automotive, food, furniture, appliances, and luxury, experiencing increased sales compared to July, according to a survey by the China Beige Book. Retail sales in July rose by 2.5% year-on-year, raising concerns about China's economic growth, but the August survey showed a surge in spending, particularly in the services sector, which saw continued strength in travel and hospitality. Additionally, corporate borrowing increased as the cost of capital declined, indicating a boost in business activity. However, China's property sector continued to worsen, with house prices barely growing and home sales declining.
China's economy is showing signs of improvement, with officials in two big cities taking steps to stabilize the property markets and attract more home buyers.
Chinese consumer spending has rebounded in certain sectors, but concerns persist over the property market and GDP growth falling below 5%, according to Shehzad Qazi, managing director of China Beige Book.
China is planning to relax home-purchase restrictions and implement new measures to address the debt crisis in its property sector, which accounts for a quarter of its economy, in an effort to boost consumer demand.
Chinese homebuyers remain skeptical about entering the property market despite the Beijing government's measures to revive the economy, including lower mortgage rates, due to concerns about the slowing economy and the deepening crisis in the debt-ridden property sector.
The slowdown in China's property market continues despite government measures to revive the economy, with analysts warning that the sentiment among many Chinese is too weak for these moves to be effective.
The authorities in Beijing and Shanghai are implementing measures to ease mortgage lending rules in an effort to stimulate a slowing housing market, including allowing first-home buyers to enjoy preferential mortgage rates regardless of their previous credit records. This move is expected to drive home sales in the short term, but the long-term impact is uncertain due to low consumer confidence in the face of economic uncertainty.
China's relief measures to support the property sector have spurred a home-buying spree in Beijing and Shanghai, with transaction volumes in both cities increasing significantly, indicating robust housing demand; however, concerns persist that this demand may not be sustained due to other restrictions and a faltering growth outlook.
China's real estate sector is facing a split market, with sales picking up in larger cities while slowing down in smaller cities, but further policy support is expected to stabilize the finances of property developers and dispel financial panic in the next two months.
Nanjing, a major Chinese city, has lifted restrictions on home buying in an effort to revive the struggling property sector and stimulate the economy, becoming the first big city to do so.
The struggling real estate sector in China, due to a current crisis and government regulations, is impacting consumer spending and causing Chinese tourists to be slow in returning to international travel. As Chinese homeowners prioritize savings and cut back on spending, global tourism destinations are experiencing a decline in Chinese visitors, resulting in a forecasted decrease of nearly 70% in China's outbound travel spending this year.
China's property sector continues to struggle with deepening falls in new home prices, property investment, and sales in August, despite recent support measures, adding pressure to the country's economy.
China's retail sales and industrial production exceeded expectations in August, with retail sales growing by 4.6% and industrial production growing by 4.5%, but fixed asset investment lagging behind at 3.2%, indicating potential instability in the external environment.
China's factory output and retail sales grew at a faster pace in August, but declining investment in the property sector poses a threat to the country's economic recovery.
Economic activity in China appears to improve in August as industrial production and retail sales show growth, however, the real estate sector continues to face challenges with property investment and sales declining, leading Moody's to downgrade its outlook for the sector.
Chinese economic data showed signs of improvement in August, with retail sales and industrial production exceeding expectations, and key commodities experiencing growth, although challenges remain in the property market.
China's economy is facing challenges due to its real estate crisis and high levels of mortgage debt, but the government is hesitant to provide fiscal stimulus or redistribute wealth, instead aiming to rely on lending to avoid a potential recession. Banks have cut interest rates and reserve requirements, but it is unlikely to stimulate borrowing. However, economists predict that policymakers will intensify efforts in the coming months, such as changing the definition of first-time home buyers and implementing property easing measures, to address the economic downturn.
China's economic data for August shows a mixed picture, with retail sales and production on the rise, property investment declining, and the urban jobless rate ticking downward, leading experts to believe that while there may be modest improvements in growth, a strong recovery is still unlikely.
The outlook of U.S. companies on China's markets in the next five years has hit a record low due to factors such as political tensions, tariffs, slow Covid recovery, and issues in the real estate market; however, complete decoupling between the two economies is unlikely.
The United States housing market has seen a 21 percent decline in previously occupied home sales over the past year, continuing the slowdown caused by rising interest rates, while prices continue to rise despite the decrease in sales, leading to a shortage of affordable homes and worsening home affordability for the foreseeable future.
China's property market is facing a crisis with an overwhelming amount of unsold homes, surpassing the number of people in the country, as the sector continues to slump since the default of China Evergrande group.
Chinese investors are rushing to sell their overseas properties, particularly in Southeast Asia, due to worsening financial conditions and the need for cash to solve domestic issues such as business failures and mortgage loan defaults. Uncertain economic conditions, low confidence in production and consumption, and tightening regulations on property developers in China have contributed to the struggle to offload these investments.
China's former deputy head of the statistics bureau estimates that there are up to 3 billion vacant homes in the country, highlighting the out-of-control property crisis that has caused a decline in tax revenue and a rise in unemployment.
China's property sector has slumped since 2021, with big-name developers teetering close to default and an abundance of vacant homes that even China's population of 1.4 billion can't fill, according to a former official.
China's urbanization drive is slowing down, which is expected to further impact the struggling property sector that has been plagued by debt problems and declining consumer confidence. Managing the excess housing supply and diversifying the economy away from reliance on the property sector are crucial for a healthier Chinese economy.
New home sales dropped in August due to high mortgage rates, with sales of newly constructed homes decreasing by 8.7%.
China's flailing real estate sector may take up to 10 years to fix, according to economist Hong Hao, as the sector continues to suffer from a debt crisis and oversupply, while demand is in long-term decline. Beijing officials are grappling with the challenge of reducing reliance on real estate without harming the economy in the short term.
China's economic outlook, particularly for the real estate sector, is expected to become clearer in the last three months of the year, with potential government support and loosening of restrictions to stabilize the housing market and allow the economy to recover fully by mid-2024. However, economists predict that real estate growth will remain weak and prices may fall gradually, as significant price declines could have adverse social consequences.
China's new home prices rose slightly in September, ending a four-month decline, as developers accelerated launches to benefit from supportive measures, according to data from China Index Academy.
Chinese households are increasingly opting for domestic brands as their budgets tighten and national pride grows, with home-grown brands in cosmetics, clothing, and household appliances seeing a rise in market share, although analysts say Beijing needs to do more to revive consumer confidence.
As the US housing market starts to cool down, homebuyers are being presented with a good opportunity as more homes see price reductions, according to Zillow, with 9.2% of listings having a price cut in the week ending September 16, a higher rate than in 2019.
Home prices in the U.S. rose by 3.7% in August, with New England states experiencing the largest growth, while Western states saw declines in home prices; California had the highest median sales price, and CoreLogic predicts a 3.4% annual home-price growth by August 2024.
China's recent package of relief measures to boost the struggling property market has not yet had a significant impact on homebuyer confidence, leading experts to suggest that more stimulus policies may be needed to revive the market. Despite the government's efforts to lower mortgage rates and reduce down payments, weak sales data and further price declines are expected.
The Chinese economy is predicted to grow about 5.7 percent in the fourth quarter, surpassing the 5 percent annual growth target, driven by unleashed services consumption potential, accelerated infrastructure investment, and growth in high-tech and private manufacturing investment, according to the BOC Research Institute.
Car sales in China increased 4.7% in September, driven by discounted and new models ahead of holidays, with new energy vehicle sales growing 22.1% and accounting for 36.6% of total car sales.
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