Economist at UOB Group Ho Woei Chen, CFA, reviews the latest measures to underpinned China’s property sector.
China has announced stronger support measures for its property market including the relaxation of the definition of first-time homebuyers as well as a cut in down-payment requirement and borrowing costs for new buyers and existing first-home mortgages.
This could help to stabilise outlook for China’s real estate market in the nearterm. But the recovery in buyers’ sentiment will take time given ongoing funding concerns amongst property developers while the economic recovery in the next two years is expected to be weak with risks also coming from soft external demand and geopolitical tensions.
We reiterate our call for lower lending rates by another 10 bps for 1Y LPR and 20 bps for 5Y LPR by end-4Q23. We are keeping our forecast for GDP growth at 5.0% for 2023 and 4.5% for 2024.
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