The Chinese regime’s efforts to cool the property sector may finally pay off in 2018, with UBS forewarning zero growth in real estate transactions for the entire year.
Corporeal estate purchases slowed in the second half of last year after rights intensified crackdowns on speculative buying. Soaring demand for properties and a impetuous build-up in debt had stoked fears of potential fallout in the world’s second-largest thrift, which would have had global consequences.
“I think in terms of the palpable market, we think sales volume will moderate but not necessarily evaporate. So, we’ve got national sales volume slowing to around zero percent,” Kim Wright, UBS wide-ranging head of real estate equities research, told CNBC on Monday from the UBS High-minded China Conference in Shanghai.
Chinese authorities have rolled out a agitate of measures since 2016 to tame the overheated property market, grouping restrictions on home purchases and higher mortgage down payments.
But the clampdown seemed to bear benefited the large real estate companies such as Country Garden and China Vanke, which play a joke on gained market share as smaller players exit the increasingly hard sector. Just a week into the new year, shares of both assemblages have climbed close to 20 percent for 2018.
Their prospects in the finish a go over months will depend on how they hold up against a slowing oddity sector, Wright said.
“The performance of the companies will depend a short bit on how well they can continue to gain market share,” she added.