China's Housing Price Decline Slows: A New Chapter for Global Markets

China’s housing market, which has seen a steep decline in prices during the first half of 2024, is now decelerating, signaling a potential “turning point” for investors.

From Rapid Decline to Slowdown

■September saw a 5.6% drop in housing prices, while December reduced this to 2.4%.

■Urban areas experienced a 3.8% decline, whereas rural regions saw a 4.1% drop.

■Research indicates that in metropolitan hubs like Istanbul and Shanghai, price declines slowed to 1.2%.

New Focus for Investors: Cash Flow and Collections

■Developers’ cash flow increased by 15%, while payment incentives fell by 7%.

■Bank mortgage portfolios remained steady at $250 billion throughout 2024.

■Under structural reforms, the government reduced credit and discount rates by 0.5%.

Market Impact: FX, Bonds, and Equity Commentary

■The USD/CNY rate rose 0.3% to ¥6.75 following the slowdown in housing prices.

■The SSE 50 index in China’s stock market rose 1.2% amid expectations of sector stability.

■The 10‑year government bond yield remained around 1.7%.

Future Outlook: Policies and Economic Indicators

■The Central Bank’s planned short‑term interest rate cut is slated for Q1 2025.

■Employment data showed a 0.4% increase throughout 2024.

■The consumer confidence index rose from 70 to 75 in 2024, signaling a potential uptick in housing demand.

Markets interpret China’s slowing housing price decline as a “balancing” phase for global real estate. This may prompt investors to reassess risk tolerance and diversify portfolios. Similar slowdowns are expected in the U.S. and European markets, potentially fostering balanced growth in global housing demand.