UBS forecasts China’s growth in property sales to stop

Almaty. January 8. Silkroadnews - According to the Swiss financial holding UBS, the property sales growth to stop in China, CNBC reported.
“The Chinese government’s efforts to cool the property sector may finally pay off in 2018, with UBS forecasting zero growth in real estate transactions for the entire year,” the report said.
The growth in real estate sales slowed in the second half of last year after the authorities stepped up the fight against speculative buying. The sharp increase in demand for real estate and rapid growth of arrears have raised concerns about potential consequences for the world’s second-largest economy, which would have had global consequences.
“I think in terms of the physical market; we think sales volume will moderate but not necessarily collapse. So, we’ve got national sales volume slowing to around zero percent,” Kim Wright, head of real estate equities research at UBS, said.
In 2016, Chinese authorities started undertake large-scale measures to tame the overheated real estate market, including restrictions on purchase of housing and higher mortgage payments.
These measures, however, have unexpectedly benefited the large real estate companies, such as Country Garden and China Vanke, which increased their market share as smaller players were forced to leave. Just a week into the new year, the shares of both companies grew by almost 20%.
Wright said their prospects in the coming months will depend on how they can hold up against a slowing real estate sector.
“The performance of the companies will depend a little bit on how well they can continue to gain market share,” she noted.