Chinese property bottom far, far away

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ANZ has a good idea.

  • Property construction will decline another 30% to 580 million m2 by 2035 in our baseline scenario.
  • Over 50% of new demand will stem from upgrading, instead of urbanisation.
  • Urban renewal is unlikely to contribute much to the sector.
  • Property rent rather than property price will be crucial to stabilise the sector, because rent will account for 75% of value added of the sector. 

That seems pretty gloomy. But it makes one rosy assumption. Today, there is a large gap between sales (which are down about half) and starts (which are down about three-quarters).

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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.