China’s January home sales are expected to disappoint the market again, which could trigger a bearish outlook for the country’s property sector and the wider economy, analysts said, reports the South China Morning Post. Home sales in 30 major cities tracked by Chinese financial data provider Wind have dropped by 38% month on month and 10% year on year in the first three weeks of this month, according to analysis by financial brokerage CGS-CIMB Securities.
In China’s tier-two and tier-three cities, homes sales are expected to log a decline of 42% for the whole of January, compared with last month, with the new homes market suffering the biggest losses, CGS-CIMB said. Tier-one cities, meanwhile, might record a 21% month-on-month slide despite recent easing policies.
“These estimates – if realised – imply that the China property sector could approach our bear market scenario, in which we estimate that property sales in China could fall 10 to 15% this year, versus an initial base case of an about 5% decline,” said Raymond Cheng, CGS-CIMB’s managing director.