China's Home Buying Readiness Hits Three-Year Low, PBOC Says
Liao Shumin
DATE:  Dec 24 2019
/ SOURCE:  yicai
China's Home Buying Readiness Hits Three-Year Low, PBOC Says China's Home Buying Readiness Hits Three-Year Low, PBOC Says

(Yicai Global) Dec. 24 -- The number of Chinese savers willing to buy a home in the next three months has fallen to the lowest level in three years, according to the findings of a quarterly central bank report.

Just 20.7 percent of urban bank depositors would consider a home purchase in the first quarter of next year, the People's Bank of China said in the report released yesterday and based on responses from 20,000 participants nationwide. That number is the least since the fourth quarter of 2016, when the figure was 20.1 percent.

Despite easing back in some cities, stricter regulation has continued to damp down the country's property market this year, with new home prices last month increasing at the most sedate pace in almost two years as the authorities adhere to the principle of "housing is for living in, not speculation." Meanwhile the economy has slowed in each quarter through September and household debt has risen.

China must not take real estate as a short-term stimulus to the economy, Housing Minister Wang Menghui has told a national work meeting, the ministry said yesterday. The country will strive to keep house prices stable in 2020 and continue to implement a long-term management mechanism to promote the sector's healthy development, it added.

The housing market in key cities is forecast to first slow next year and then maintain stable growth, according to the latest report from the National Academy of Economics Strategy under the Chinese Academy of Social Sciences.

The PBOC's findings are broadly in line with that. The number of participants in it survey who think house prices will rise in the next three months fell to 26.5 percent from 29.3 percent in the prior quarter's survey, while 11.1 percent believe prices will fall, a gain on the previous 9.8 percent.

Respondents who tend to 'deposit more' of their incomes make up 45.7 percent of the total polled, up 1.2 point from the third quarter, and 26.3 percent will spend more on 'investment,' down 1.5 point.

The top three popular investment choices for Chinese households are banks' financial products, securities brokerages, insurance companies and trust fund products and stocks, which find favor at respective rates of 49.9 percent, 20.9 percent, and 16.9 percent in the latest survey, while they were 48.1 percent, 20.2 percent and 17.1 percent in the last one.

The PBOC has canvassed urban depositors every three months since 1999. It randomly chooses 50 from 400 bank outlets in 50 cities of varying sizes across the country.

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Keywords:   People’s Bank of China,real estate