Real estate prices, sales, and construction fell in November, as the shares of Shimao Group are getting cheaper, and the situation with Evergrande is not clear.
What happened? China's gigantic housing market continues to shrink for two months in a row as the second major developer showed signs of a financial crisis. The decline in indicators has occurred after the shares of one of Shimao Group, the largest Chinese developers, fell by 20% due to concerns that the company is getting rid of assets to distribute growing debts.
Details
- According to Reuters calculations, prices of new housing fell by 0.3% month-on-month in November. Since February 2015, it's the biggest decline. Nine of the seventy cities tracked by the Chinese Bureau of Statistics showed monthly price increases in November. It was the lowest increase since February 2015.
- Official data showed that the actual cost of selling housing fell by 16.31%. That decline continues for the fifth month in a row.
- The number of new construction launches in November decreased by 21.03% compared to the same period last year. The investment of developers in real estate fell by 4.3%.
- Real retail sales rose by just 0.5% year-on-year in November, compared with 1.9% in October. This is the weakest result since August 2020 and well below pre-Covid levels. The reason is that consumers remained cautious, and pandemic outbreaks continued to cause sudden blockages. In addition, people travel less and spend less money.
- In a November report, S&P reported that up to one-third of Chinese developers may face financial problems in the next 12 months due to weak housing demand and government repression.
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Economy. Gerard Burg of Westpac said that there were no particular signs of improvement in the main economic conditions in November because the outlook is quite gloomy. According to him, the growth of industrial production accelerated only slightly, investment trends remained extremely weak, and retail sales data indicate a minimal increase in consumption.
Many economists expect the Central Bank to cut the main interest rate from the current 3.85%. It's a high level compared to any major Western economy. Additional fiscal measures are also expected in the new year to boost economic activity.
Source: The Guardian
Photo: Brett Sayles
Quoting conditions of Prian.info materials
