China’s slumping property market may finally be reaching a bottom, as credit has resumed flowing to developers while the nationwide inventory of unsold homes has shrunk, analysts said.
The decline in China’s new home sales this year may slow to 7 per cent, Fitch Ratings said on Tuesday after revising its forecast from a previous decline of 15 per cent, due to the better-than-expected performance of the property market in the first half. The credit-rating agency also lowered its forecast of the sales drop by gross floor area to 5 per cent, better than a previous estimate of 10 per cent.
“The downturn has been shorter than the ‘lost decade’ rhetoric that some investors embraced,” the analysts wrote. Since the property crisis began in 2021, the market has consolidated rapidly, with the top 15 state-owned developers expanding their market share from 15 per cent four years ago to 23 per cent in the first half of this year – a shift that has been instrumental in stabilising the sector, HSBC said.