Cross-posted from Investing in Chinese stocks
CICC Research is forecasting a 10% rise in first- and second-tier city home prices for 2016, with third- and fourth-tier cities to prices fall 5%. Although prices are forecast to rise, sales are forecast to be flat. Limited supply and rising land prices will lift home prices, along with a boost from easy money.
Inventories have been coming down (first, second and third tier cities from left to right):
Land sales are still down in first- and second-tier cities:
This chart shows the rising cost of land, specifically the cost of land sold versus the cost of land for surrounding buildings on sale. The cities from left to right are Guangzhou, Shanghai, Xiamen, Beijing, Suzhou, Nanjing, Chengdu, Tianjin, Ningbo, Shenzhen, Dalian.
Specific city forecasts:
In 2016, Shenzhen, Suzhou, Nanjing, Hefei, Nanchang, Hangzhou, Shanghai, Beijing and Guangzhou are most likely to perform better.
The expected decline or rise in inventory in 2016. The cities on the right are Chengdu, Shenzhen, Hohhot and Qingdao.
Real estate forecast to sell 1 billion square meters per year through 2022. Reality will be more volatile.
iFeng: 2016年一二线城市房价涨10% 三四线下跌5％
Hence the central government is expected to issue a policy designed to reduce housing inventory in 2016, and the policy could land within the next few weeks. It is expected that instead of dribbling out policies as happened when slowing the price rise, the government will unleash a big bang of several policies. One is expected to be the long awaited hukou reform that will allow millions to move into the cities from the countryside (or obtain residency if already living there).
“Now the central top decision-making has been clearly put forward the request to the inventory of the property market, which means that the subsequent landing policy will be introduced as soon as possible.” A source close to the Ministry of Housing, said at the same time, the current central position for the real estate market will Effect of end of the year the Central Economic Work Conference, the property market is expected next year will be more relaxed policy stance.
iFeng: 决策层释放房地产调整信号 首轮政策年底前或出台
Good luck getting freshly minted urban peasants to pay for the highly priced new housing stock.
