China has had some trouble with its real estate market in the past few years, including the default of one of its major developers and a movement by spec home buyers to stop paying their payments on homes being built. This prompted many, myself included, to predict that the next housing crash would come out of China. But now there is some good news coming out of the world’s most populous country and second biggest economy. Home sales are up and investor sentiment about the future of home prices is also up.
The change of heart for the Chinese people is likely due to the lifting of many COVID restrictions and the end of widespread lockdowns. The new outlook doesn’t extend to all locations or price points, though. A JLL report said the high-end residential market in Beijing saw transaction volume climb by 20 percent meaning that the most expensive residential real estate seems to have the most interest. Another study by CREIS found that transaction volume in less well known cities like cities of Hangzhou and Tianjin doubled in the first quarter from a year ago, compared to China’s largest cities which only saw a 0.2 percent increase. China is certainly not out of the woods yet, interest rates are still relatively low compared to the rest of the world, but at least we can worry a bit less about a complete financial meltdown from a crashing Chinese property market.
