China’s real estate sector has bottomed out, says second-largest developer
It’s been some time since we’ve spoken about the struggling Chinese real estate sector. Just a quick recap: a lot of Chinese developers expanded rapidly over the past few decades through borrowing, and this rapid expansion led to the overdevelopment of the sector. With the excess housing supply, these developers couldn’t generate the revenue they needed to pay back loans and interest payments. One major company at the forefront of these woes was Evergrande.
But according to Chairman Yu Liang of China’s second-largest real estate developer, China Vanke, while he doesn’t think we’ll see another Chinese real estate boom, he believes the real estate slump is finally over. This comes as local authorities have made it easier to acquire properties by doing things like telling banks to lend more or making it easier to buy more than one property. China Index Holdings, which monitors sales of new homes across 17 cities, saw sales rise 89% this month compared to the month earlier.
“Some positive signs have emerged in the property market,” statistics bureau spokesman Fu Linghui said at a news briefing in Beijing. “We believe the property sector will gradually help stabilize the economy in the second half.”
“In the short term, the market has bottomed out, but the recovery is a slow and gentle process and will take time,” said China Vanke’s Chairman Yu Liang at the company’s annual general meeting, according to a transcript shared on the company’s WeChat account.