JungzYeon 'First Half Settlement and Second Half Outlook' Report
Statistics show that new home sales in China during the first half of the year decreased by 20% compared to the previous year. There are also forecasts that the market will continue to remain at a low level in the second half due to persistent adjustment pressures.
According to China Economic Net on the 4th, the China Index Academy released a report titled "2024 First Half China Real Estate Market Review and Second Half Trend Outlook." The report explained, "New home sales nationwide in the first half of the year fell by more than 20% compared to the same period last year," adding that "the market adjusted more than expected."
Regarding the second half of this year, the report stated, "With the continued implementation of various government policies, the downward trend in the new housing market will somewhat slow down," but added, "Since income prospects and home price decline expectations have not significantly improved, the national real estate market still faces adjustment pressures."
Prices of secondhand homes in 100 cities fell by 3.61% during the first half, indicating continued adjustment, while new home prices showed an increase of 1.24%. Secondhand home transactions were relatively better than new home sales; from January to May, transaction volume decreased by 13% year-on-year but in May, the weekly average number of transactions increased by more than 20% compared to the same period last year. The report particularly noted that the easing of real estate transaction policies was prominently effective in cities such as Shanghai, Shenzhen, and Hangzhou. In Shanghai, for example, secondhand home transactions exceeded 1,000 per day in June.
The land market showed an even weaker trend compared to housing. Residential land transactions in 300 cities nationwide decreased by more than 30% year-on-year. Transaction prices were also negative compared to last year. Transactions were concentrated in major cities, with the top 20 cities accounting for 60% of the total transactions.
On a corporate basis, the total revenue of the top 100 real estate companies in the first half fell by 41.6% compared to the same period last year. The scale of land purchases by companies also decreased by 35.8% year-on-year, with the decline widening in June compared to January to May. The report explained, "Companies show strong investment willingness for acquiring prime land, while maintaining a cautious attitude toward land with low cost-effectiveness."
Regarding the outlook for the second half, the report predicted, "Based on optimistic forecasts, the area of new home sales is expected to decrease by about 10% year-on-year, and based on pessimistic forecasts, by about 18%. On the supply side, it will be difficult to reverse the downward trend in construction area, and the year-on-year decline is expected to widen." It added, "Real estate development investment is still expected to be sluggish, but policies such as project white lists will be deeply implemented to promote investment."
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