Is Chinese real estate going to slow or not?

Regular readers will know that the notion of a coming slowdown in Chinese real estate investment has been one reason why MB is more bearish on Australia than most. We’ve been expecting a slowdown in investment and floor space under construction for a year yet it is has not materialised. Indeed, housing investment have been the key area of Chinese economic out performance, protecting it from the impacts of the trade war:

Yet there are reasons, or reasoning, to suggest that that slowdown is still coming. Let’s run through them.

First, household debt growth, which is basically mortgages, has been falling and it is close to levels previously associated with falls in starts:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.