Image Source : China Visual

BEIJING, January 20 (TMTPOST) —— China's commercial residential building sales area is expected to decline by about 10% year on year in 2023, according to the prediction made by Lin Zhenhong, head of the Mainland/Hong Kong real estate investment research department at UBS, at an analyst conference recently.

In the first half of 2023, China's commercial residential building sales area is expected to drop about 20% from a year earlier, and in the second half of 2023, the sales area is highly likely to be about the same as in the same period of 2022.

According to the National Bureau of Statistics, 1.146 billion square meters of the commercial residential area were sold in 2022, down 26.8 percent year on year. Based on this estimate, 2023 commercial residential area sales are expected to be 1.03 billion square meters, Lin said.

According to UBS Real Estate Research, China's long-term housing demand will shrink to 928 million square meters per year by 2030. From 2022 to 2030, the country's average housing demand will reach 975 million square meters per year.

China's latest round of tightening housing demand began at the end of September 2016.   After July 2021, as real estate sales declined again and again, the government began to loosen the regulation of the real estate market in November of that year. In 2022, the government also introduced several stimulus policies, such as two cuts in the reserve ratio and three cuts in the LPR. 

Local governments also took a series of measures to boost real estate markets, starting in the third - and fourth-tier provinces and cities. On April 29, 2022, China stressed support for local governments to improve real estate policies based on local conditions. Subsequently, the real estate markets in second-tier cities gradually deregulation, including Chengdu, Hangzhou, Xiamen, and other cities.

According to CRIC Research Center, 295 provinces and cities introduced 595 real estate deregulation policies in 2022. From June to August of 2022, Jinan, Xiamen, and other cities gradually increased efforts to loosen restrictions due to the poor effect of earlier policies.