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30% fall in house prices likely: Barclays
By Wang Yanlin |
November 8, 2011, Tuesday
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Online Edition
Online Edition
CHINA'S property prices may decline by up to 30 percent during the current downward cycle, but it should not lead to systemic crisis or collapse, an industry report said today.
"Chinese property markets already exhibit significant risks of a bubble, judged by various conventional measures," Barclays Capital said in a report.
"Past property booms were supported by strong income growth, steady urbanization, favorable demography, limited investment alternatives and healthy household balance sheets. However, these factors may turn negative in the coming years, generating significant risks of a bubble bursting," the report said.
Barclays Capital expected that the current realty tightening policies might be adjusted if the average price decline approached 20 percent. Households were not likely to be forced to sell, while large developers could survive the downturn, it said.
Small developers would probably suffer from increasing financial stresses during this process and be driven out of the market finally, Barclays said.
"Chinese property markets already exhibit significant risks of a bubble, judged by various conventional measures," Barclays Capital said in a report.
"Past property booms were supported by strong income growth, steady urbanization, favorable demography, limited investment alternatives and healthy household balance sheets. However, these factors may turn negative in the coming years, generating significant risks of a bubble bursting," the report said.
Barclays Capital expected that the current realty tightening policies might be adjusted if the average price decline approached 20 percent. Households were not likely to be forced to sell, while large developers could survive the downturn, it said.
Small developers would probably suffer from increasing financial stresses during this process and be driven out of the market finally, Barclays said.
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