China’s Real Estate Market Set to Cool Further in 2018: CASS

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One of China’s leading think tanks expects the country’s property markets to cool further next year, with a strong likelihood of real estate investment, sales values and home prices easing further.

“In general, this short period of pick-up in the property market is drawing to a close,” said an annual research report released by the National Academy of Economic Strategy at the Chinese Academy of Social Sciences on Tuesday.

“A new period of correction and cooling will emerge this year.”

The report sees the sales value of commercial residential buildings posting a significant year-on-year drop in 2018, while housing inventory will continue to diminish, although at a slower rate.

The trend of slowing growth in home prices will hold steady in 2018, as growth in property investment dials down compared to the current year.

CASS sees a bright spot in the home leasing market next year, particularly in first and second-tier cities, as Beijing drives growth in the sector to help address urban housing problems.

“It is a promising market waiting to be developed, with a market potential value totalling trillions of yuan,” said the report.

While CASS expects the property market to remain stable next year in the absence of major policy shocks, the report nonetheless warns of the potential for a collapse of the housing bubble, or its further expansion on the back of a revival in speculative investment.

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