NATIONAL HOUSE PRICES COULD SEE AN INCREASE IN 2020

Since May 2019, investment in real estate development, new floor space for housing and funds obtained by real estate developers have all showed signs of mild growth. According to the National Bureau of Statistics, from January to November 2019, real estate investment increased by 10.2% year-on-year to RMB 12,126.5 billion; the total area of commodity housing sales was 1.489 billion square metres, a year-on-year increase of 0.2%. The average unit price from January to November 2019 was RMB 9,335 per square metre, an increase of 7.1% year-on-year; the sales of commodity housing reached RMB 13.9 billion, an increase of 7.3% year-on-year. In the face of weak global trade, companies remain cautious about their business prospects in the next six months. However, the continued consumption upgrade of the huge consumer market in the Mainland and the monetary easing by the People's Bank of China have helped boost domestic demand sectors that are less affected by the economic cycle. On the real estate front, the country could maintain a modest regulation of the property market, including specific governing for each city. The authorities are also expected to gradually optimise the long-term real estate management mechanism through housing and land policies. Developers' promotional packages could continue to help release demand for home upgraders to stabilise the property market in 2020. Subject to policy and credit easing, some high-quality developers with stable contract sales and profitable growth capabilities could help stabilise overall average price growth. In addition, under the influence of high housing prices in first- and second-tier cities, with even bigger downside pressure to be seen in the third- and fourth-tier cities, home prices in the country will see an increase overall in 2020. In the next issue, Vigers will analyse the first-tier cities' outlook for the first quarter of 2020.