China on Comeback Trail
China has experienced its first property sector rise since September 2011 in proof that the market may be turning, but developers aren’t rushing to start new projects -- and hence there’s no big boost in home loans. Property data released for June by the National Bureau of Statistics shows prices rising 0.02 per cent month-over-month. Inventory levels are high, however, and properties already under construction are equal to 3.7 times total sales in 2011.
Developers want to clear some of that overhang before breaking ground on new projects, despite the recent statistics. While some expect a rapid rebound in investment by developers, it might take a little longer than in 2001, when things happened rather quickly after the government abandoned its controls on real estate. Developers are unlikely to want to cash in so quickly this time around and will wait until the time is definitely right before they dive back into the property sector.