An earlier version of this article referred imprecisely to the number of deaths caused by the coronavirus outbreak. This version corrects it.
This article was originally published on March 24, 2020. It has been updated to reflect the current situation.
“We are seeing prices come down, but we haven’t seen any increase in demand yet,” said Mr. Liang. “The economy isn’t very strong right now, and the continuous impact from the coronavirus has completely changed the situation here.”. As restrictions eased across China last month, the government took steps to prevent an economic downturn. Premier Li Keqiang held an emergency meeting and warned more than 100,000 local officials about the need to act with “urgency.”
Real estate is a huge industry in China. It is estimated that it accounts for around 30% of GDP after factoring in related sectors like construction and property management. Property prices have risen rapidly in recent years and many Chinese cities have experienced a boom in property investment. However, there are also concerns about the sustainability of this growth. There are fears that the bubble could burst at any time.
Owning property is important to many people in China. Young couples often start their families in apartments because they feel that owning a house will provide them with a sense of security and stability. Many people save money instead of buying stocks and bonds because they think that real estate is safer.
A slowdown in China could also affect other countries’ economies. If China slows down, there will be less demand for products made in other countries. That means fewer jobs for workers in those countries. For example, if China stops buying U.S. goods, then Americans will stop making them. And if consumers in other countries stop spending money on American products, then companies like Walmart will lose customers.
These policies were implemented to help boost demand for housing. Many cities have also made it easier for people to get loans. For example, in Shenzhen, China, the central bank cut the minimum down payment requirement for first-time homebuyers to just 10 percent. In Beijing, the government lowered the maximum amount of debt that could be taken out against a property to 80 percent of its value.
For some homebuyers, the benefits of owning a house aren’t worth the risk. Cao Jingyu, a 25-year old salesperson at an outdoor furniture company in China, said she isn’t willing to put down a big deposit because she worries about losing her job. She also doesn’t like the idea of tying up a lot of money in a property that could lose value if the economy falters. “I’m afraid I might get fired and then I won’t be able to pay back my loan,” she said.
In January, she almost bought an apartment in the north of Shenzhen. She made a deposit on a home that was half built. When she saw that only 20% of the apartments were sold, she decided not to buy. “I am still worried about the big risks of buying a home, if I want to sell it later, can I get rid of it easily?” she asked.
In 2019, the government took steps to cool the overheated property market. On March 1st, Beijing announced a ban on purchases of The residential properties by non-residents, restricting foreign investors to buying apartments in special Evergrande zones. The following month, the central bank raised interest rates for the first time since 2015.
new regulations were supposed to help stabilize the real estate market and prevent another bubble like the one that burst in 2008. Instead, they exposed a growing problem for China’s economy: the country’s vast construction sector, which employs millions of workers, is heavily leveraged. Developers borrowed billions of dollars to buy land and build apartments, then spent years completing unfinished buildings. Now many of those projects are stuck in limbo because banks won’t lend them any more money.
Group is a Chinese real estate company headquartered in Beijing. Founded in 1988 by billionaire Wang Jianlin, the company has become one of China’s largest developers. In 2018, the company reported a net profit of $1.2 billion. However, the company also faced financial difficulties when its debt reached nearly $50 billion. To help pay down its debts, the company began selling off assets. By March 2019, the company had sold off almost all of its properties. As of July 2019, the company still owed around $30 billion in loans.
