China's new home prices will likely show no growth this year, according to a Reuters poll, highlighting the intense pressure in the crisis-hit property sector that has put a choke-hold on the economy and left policymakers in a scramble to restore confidence.
The expected 0% year-on-year growth in home prices compared with a 1.4% gain tipped in the previous forecast in May, a Reuters poll of 12 economists conducted from Aug. 16-25 showed.
Authorities have introduced several measures over the past year to prop up the sector, including smaller down payments, allowing bigger mortgages and cuts in mortgage rates. However, confidence remains low, partly due to persistent liquidity problems among property developers as well as a broader slowdown in the economy.
"It is estimated that every one percentage point decline in property investment may drag down the GDP growth rate by 0.1 percentage points," said analyst Ma Hong at Zhixin Investment Research Institute. The biggest cities are expected to relax property curbs in some suburbs, "but it is hardly going to save the whole real estate sector from a downward spiral," said Gao Yuhong, analyst at CSCI Pengyuan Credit Rating Limited.
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