Chinese ghost cities are a by-product of the construction boom. (pic via Twitter)In the midst of a trade war, China has another new worry and this time it is the state of affairs in their property market. Standard Chartered Plc released the findings of their sentiment index for the property markets which returned a figure of 38.5 for the last month, the lowest since 2010 when the survey began.
The index is based on a semi-annual survey of property managers from nine Chinese cities. Factors weighing down negatively on the mood of property managers range from deteriorating financial conditions to curbs on housing purchase and the impending introduction of property tax.
A particular reason for alarm lies in the fact that the property sector in China has seen robust growth in recent times even as the nation grapples with the raging trade war with the United States. An analyst highlighting the potential downsides said “Property investment will probably slow later this year, adding to downward pressure on the economy. If this seriously threatens economic growth, policy makers will consider easing their grip”.
Coming days will bear witness to whether the Chinese property markets show resilience to tide over the present negativity and help prop up the growth of an increasingly stressed economy.
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