China Must Resolve Real Estate Crisis and Not Rely on Exports Alone, Expert Warns

Three downward spirals in the real estate sector are holding back China’s recovery, says Nomura’s chief economist

A housing project under construction in Yantai, Shandong province, on July 23, 2024.

China’s economy has struggled to meet expectations over the past year, with the persistent slowdown in the real estate sector proving a major drag, Lu Ting, Nomura’s chief China economist, said at the 2024 Greater Bay Area Chief Economists Forum.

In the first half of 2024, the sales area and value of new commercial housing in China fell by 19% and 25% year-on-year respectively, according to the National Bureau of Statistics. Housing starts, a measure of new residential building, fell by 23.7% to about 380 million square meters, while, according to market research firm CRIC China, sales by the top 100 developers dropped by 39.5%.

These data show this round of the property crisis is different from previous ones, as the sector faces three downward spirals, Lu said.