The economic slowdown in China has proven to be a dampener for a range of sectors in the world’s second biggest economy and home prices have taken a hit as well. However, it is important to note that the government has now urged financial institutions to ensure that people have access to credit. Additionally, interest rates are also set to be lowered. In a new poll conducted by Reuters, analysts now believe that the hone prices in China are going to recover and that is an improvement from the sentiments from earlier this year. The economy is going through its slowest rate of growth in decades and in order to generate economic growth, many of the governments inside China have decided to do away with restrictions with regards to buying a home.
Needless to say, the prices of homes were not expected to rise at a desirable rate at the start of the year and it was reflected in the poll conducted at the time by Reuters. The analysts and experts who took part in the poll believe that property prices are going to go up by 5% this year and property investment is also going to up by 7%. Much of that has to do with Beijing’s policies which are now geared towards creating demand and making it easier for home buyers to get what they want.
The research head of a property services company in China, Daniel Yao credited the government’s policies for the improved outlook. He said,
It is expected that the marginal relaxation of local policies will begin to take effect in the second half of 2019, which will form a certain support for demand and price.
Some of the other analysts believe that the intervention by local governments in China is also going to be a big factor and one analyst suggested that reduction in home loan rates could also be an important measure to prop up home sales in the country for the foreseeable future. However, not all analysts were as optimistic and a research head at Knight Frank, David Ji stated that the way in which Beijing controls Chinese policies will be a factor that will perhaps undermine whatever is done by local governments. Ji said,
This is a centrally managed market no matter how diverse it is. Also, overall there is large demand for (better) housing.