1/6
Chen Long, from Chinese research outfit Plenum, gave a very interesting presentation yesterday on Chinese real estate demand to a small group of us. The title of the presentation was "No More Growth for Chinaβs Real Estate."
Chen Long, from Chinese research outfit Plenum, gave a very interesting presentation yesterday on Chinese real estate demand to a small group of us. The title of the presentation was "No More Growth for Chinaβs Real Estate."
2/6
I can't link to the presentation because it is paywalled, but it was pretty impressive. For investors who can afford it, I think Plenum does great research.
Chen showed the growth in Chinese real estate housing construction to 1.57 billion square meters last year.
I can't link to the presentation because it is paywalled, but it was pretty impressive. For investors who can afford it, I think Plenum does great research.
Chen showed the growth in Chinese real estate housing construction to 1.57 billion square meters last year.
3/6
He then projected demand over the next decade based on population census data and estimated urbanization rates. He argued that even with fairly optimistic assumptions, it is hard to come up with demand projections that aren't at least 20-30% below current levels.
He then projected demand over the next decade based on population census data and estimated urbanization rates. He argued that even with fairly optimistic assumptions, it is hard to come up with demand projections that aren't at least 20-30% below current levels.
4/6
Even ignoring the current problems in the property sector and ignoring the huge stock of empty apartments, and assuming that homebuyers will be as wiling to own empty apartments in the future as they have in the past, he expects real demand for new...
Even ignoring the current problems in the property sector and ignoring the huge stock of empty apartments, and assuming that homebuyers will be as wiling to own empty apartments in the future as they have in the past, he expects real demand for new...
5/6
housing in the coming decade to be way below the supply created in recent years. His analysis also ignores the pro-cyclical impact of slowing GDP growth and declining real estate prices on property demand. He assumes that the desire to own an apartment hasn't changed.
housing in the coming decade to be way below the supply created in recent years. His analysis also ignores the pro-cyclical impact of slowing GDP growth and declining real estate prices on property demand. He assumes that the desire to own an apartment hasn't changed.
6/6
His research implies that even if local governments in the near term can stabilize price expectations, it can only be a temporary halt. Future demand simply isn't enough to maintain the property sector at anything near current levels.
His research implies that even if local governments in the near term can stabilize price expectations, it can only be a temporary halt. Future demand simply isn't enough to maintain the property sector at anything near current levels.
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