China housing demand to stay at 75% below 2017 peak, Goldman says
The gloomy forecast casts another shadow over the future of China's stagnant property industry. PHOTO: REUTERS
China housing demand to stay at 75% below 2017 peak, Goldman says
– China's demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years due to a shrinking population and expectations of price declines that have been hurting investment interest, according to Goldman Sachs Group.
'Falling population and slowing urbanisation suggest decreasing demographic demand for housing,' Goldman Sachs analysts wrote in a report. 'Investment demand in China could turn negative as owners sell vacant apartments.'
As a result, China's annual urban demand for new residential properties will likely remain slightly below five million units over the next few years, substantially below a peak of 20 million units in 2017, they said.
The gloomy forecast by the US investment bank is casting another shadow over the future of China's stagnant property industry, which has been struggling under a mountain of debts following years of oversupply.
China's new home prices fell the most in seven months in May, official data showed on June 16, suggesting the effect of a stimulus blitz last September is wearing off.
Senior government officials are renewing pledges to revive a sector that at its peak accounted for nearly one-fifth of the world's second-largest economy.
Citing their own calculation, Goldman economists including Mr Andrew Tilton and Dr Hui Shan said annual demographic demand in urban China will roughly be halved within a decade, falling to an average of 4.1 million housing units a year in 2025-2030 from 9.4 million units a year in the 2010s.
With house price expectations falling, holders of investment properties are likely to be net sellers for the foreseeable future, the report said. BLOOMBERG
Join ST's Telegram channel and get the latest breaking news delivered to you.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
Thailand Cabinet approves 40 billion baht bid to host Formula 1 race in 2028
[BANGKOK] Thailand's Cabinet has approved a US$1.2 billion bid to host a Formula One street race in its capital Bangkok in 2028, government officials said on Tuesday (Jun 17). If successful, the Thai capital would win a contract to host a race each year from 2028 to 2032, government spokesperson Jirayu Houngsub told a news conference. 'In the next 2 to 3 years, Thailand will have world-class competition, which we never thought would actually happen in Thailand,' Jirayu said. Tourism Minister Sorawong Thienthong told reporters the bid is worth about 40 billion baht (S$1.6 billion). In March, Thai Prime Minister Paetongtarn Shinawatra met with Formula One chief Stefano Domenicali and said Thailand would commission a feasibility study into hosting a Grand Prix on a Bangkok street circuit from 2028. Hosting the race will help promote tourism, a key driver of Thailand's economy, the government has said. Formula One already has a crowded schedule of 24 races around the world with four in the Asia-Pacific region, including the Singapore Grand Prix in South-east Asia. Thailand has an FIA-accredited track in Buriram in the northeast of the country, which currently hosts a round of the MotoGP motorcycling world championships, but the proposal is for a street race in the kingdom's capital. REUTERS
Straits Times
an hour ago
- Straits Times
Taiwan seals Ukraine combat-tested drone software deal to help deter China
Auterion said it had agreed to a strategic partnership with Taiwan for uncrewed systems and drone swarming software. PHOTO: REUTERS SUAO, Taiwan - Taiwan sealed a partnership deal on June 17 with US and German-based Auterion for drone software battle-tested in Ukraine to help strengthen the island's defences against growing military threats from giant neighbour China. Auterion, whose software is used in Ukrainian drones operating combat missions against Russia, said the deal could eventually lead to the technology being used in millions of drones for Taiwan. China views democratically governed Taiwan as its own territory and has ramped up its military pressure over the past five years, including staging half a dozen rounds of war games. Taiwan's government rejects Beijing's sovereignty claims. Since Russia invaded Ukraine in 2022, Taiwan has been studying how Ukraine has deployed drones, both in the air and at sea, to successfully offset Russia's numerical advantage on the battlefield, given China's forces also outnumber Taiwan's. Auterion said it had agreed to a strategic partnership with the Taiwan defence ministry's research and development arm, the National Chung-Shan Institute of Science and Technology, for uncrewed systems and drone swarming software. 'What we're bringing to the table has been combat-proven in Ukraine to deter aggression and destroy tanks, naval assets, and other really expensive equipment. So by building a large autonomous fleet, Taiwan can deter China,' Auterion's chief executive Lorenz Meier told Reuters. 'The partnership is super long-term. So I think in terms of, if you're trying to put that in number of drones or dollars, we're expecting millions of drones eventually over multiple years and hundreds of millions of dollars in value that's being created,' he added, speaking at a ministry-organised sea drone exhibition at the north-eastern Taiwanese port of Suao. Pushed by the United States, Taiwan has been working to transform its armed forces so as to be able to wage 'asymmetric warfare', using mobile and often cheaper weapons which still pack a targeted punch, like drones and truck-mounted missiles. Chung-Shan president Lee Shih-chiang thanked the five foreign companies who participated at the Suao exhibition. 'I believe that you will soon be sanctioned by the Chinese government, but do not fear, because you have chosen the democratic camp,' he added. Ukraine has deployed sea drones not only to attack ships in Russia's Black Sea fleet, but also to shoot down aircraft. The unmanned sea drones on display in Suao included not only those that could be packed with explosives for high-speed suicide missions, but smaller craft that can conduct low-profile reconnaissance. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
2 hours ago
- Straits Times
New Zealand PM to discuss trade, tourism and security on first visit to China
Mr Luxon expects talks during his four-day visit to cover topics of security and defence. PHOTO: REUTERS New Zealand PM to discuss trade, tourism and security on first visit to China BEIJING/WELLINGTON - New Zealand's Prime Minister Christopher Luxon will visit China from June 17, looking to foster trade ties and woo tourists and students, although thorny issues of security and defence will figure on his agenda in meetings with top leaders. Making his first visit to China since becoming prime minister in November 2023, Mr Luxon will arrive in the financial hub of Shanghai before heading to Beijing for meetings on June 20 with President Xi Jinping and Premier Li Qiang, his office said. "It's all part of our plan to grow our economy - creating more jobs, lifting wages, and putting more money in your back pocket," Mr Luxon said in an Instagram post as he set off. The visit comes as Beijing's growing influence in the Pacific during the last few years has alarmed many Western nations whose traditionally stronger security foothold there is being challenged. "There are a whole bunch of issues and challenges in the relationship," said Associate Professor Jason Young, director of the New Zealand Contemporary China Research Centre at Victoria University, while adding that both sides agree they have significant interests. New Zealand aired concerns in February, for instance, when the Cook Islands, within its constitutional ambit, signed pacts, such as one on co-operation on the economy, infrastructure and seabed mining, with China, without consulting it first. The presence of a Chinese People's Liberation Army Navy task force in the Tasman Sea and Chinese activity in the Pacific also pose challenges for the relationship, Assoc Prof Young added. Significant interests Trade and travel have proved less fractious areas for the two countries, however. The first developed nation to sign a free trade deal with Beijing in 2008, New Zealand counts dairy, meat and wood products as its largest items of export to China. Tourism and education are major services sectors. The Pacific country's exports to China in 2024 stood at NZ$20.85 billion (S$16.21 billion), made up of NZ$17.75 billion in goods and NZ$3.1 billion in services, the foreign ministry says on its website. Chinese tourists are the third-largest group of international visitors to New Zealand, though their numbers are still nearly a fifth lower than in 2019, before the Covid-19 pandemic, official data shows. On the weekend, New Zealand said it would start in November a 12-month trial of visa waivers for Chinese passport holders arriving from Australia with visas valid for its neighbour, reciprocating China's visa-free policy for New Zealanders in 2024. Mr Luxon, who has called China "a vital part" of his Pacific nation's economic story, has told domestic media that based on the "mature relationship" with Beijing, he expects talks during his four-day visit to cover topics of security and defence. "The challenging global outlook makes it vital that we are sharing perspectives and engaging China on issues that matter to New Zealand," his office said in a statement last week. The leaders of the two countries previously met on the sidelines of November's Apec summit in Peru, while Mr Li visited New Zealand in June 2024. Wellington has historically taken a more conciliatory approach towards China than Australia or its other partners in the Five Eyes security arrangement. But in recent years it has beome more vocal on issues such as human rights, the international rules-based order and potential militarisation of the Pacific. In June 2023, then Prime Minister Chris Hipkins visited Beijing, prior to Mr Luxon. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
