China’s construction industry is collapsing? – Tejarat News
Less than a month after the “censorship of the anti-speculation slogan in the housing market” by the Chinese government, observers of this country’s economy analyze the “Chinese construction industry” in a state of “collapse”.
According to Tejarat News, from the latest research conducted by institutions that monitor China’s economic situation and their results have been published in Bloomberg, Reuters and the Wall Street Journal, it indicates that China’s construction industry, as the old engine of “growth” in this country, is almost out of order. It is so that “pre-purchase” or “buying” of a house has recorded a 26-month downward trend, and at the same time, the rate of decline in housing prices has also hit the highest record in the last 10 months (from 2018 until now, house prices in the main cities of China have increased by 15% to The average face has dropped). In addition to the collapse of the buying sectors and the pulse of housing prices, the construction investment of the house-building giants has also recorded a record of the 18th month with a 20% annual decrease.
The cooling of the atmosphere of “property investment” and “construction investment” in China, despite the government’s clear signals of “financial and credit support for the flow of housing production specific to the criteria”, is a strange duality for which there is an invisible answer.
China’s construction industry is in the “melting” phase
China’s economy and the country’s housing economy entered a different phase from the past after the era of Corona and “Corona Zero”. Economic growth lower than the target rate caused by “decrease in consumer spending” on the one hand and “distrust of housing capital buyers” on the future of construction investment on the other hand, went hand in hand so that China’s “building” was in the “meltdown” phase. While Chinese banks have a mission to clear the “triple red lines” of 2021 and 2022 in the area of mortgage payments and once again, to resume spending money to “credit massive house construction” in this country, but “the desire to buy and pre-purchase” House” in this country is serially declining. The Chinese are uncertain about the future of “growth” and perceive that “long-term property returns” will no longer be what they were in previous years. Part of this “change of view” of the Chinese housing market is the shocking image of “a significant amount of empty houses and unfinished towers”. It is related in the main cities and suburbs. In China, there are empty houses equivalent to “7 years of consumer demand supply”. This situation, the “meltdown of the Chinese real estate market” has become so noticeable that “Moody’s” has predicted a “negative” future for this market in its analysis.
Although, the results of the analysis about the “present and future of China’s housing and construction market” indicate the “collapse (melting)” of this sector, but there is also a hypothesis among them; Economic policymakers in China have come to the conclusion that the housing and construction sector, despite the fact that it constitutes 30% of the GDP, must be “destroyed and rebuilt” once and for all. In other words, this sector is a period of transition or transformation in terms of “getting out of the favorable situation for Malachi and turning the housing market into a favorable consumer market” as well as “correcting the behavior of builders from building houses with the intention of selling to multi-family houses to construction for consumers.” ” needs.
Source: World Economy