Fitch: China’s Housing Demand to Stay Resilient Through 2030
Fitch Ratings says that China’s housing demand will remain relatively resilient over the next 15 years through 2030. The volume of new commodity homes to be sold and completed will fall, but the magnitude of the decline is likely to be modest on an annualised basis. However, short-term market volatility will persist, driven by factors that result in volume and price fluctuations.
Fitch forecasts that China would need to build 800 million square metres (sq m) of residential-property space – the size of Singapore – a year between 2016 and 2030 to meet demand, more than 90% of which would have to be met by commodity homes built by property developers, as affordable housing built by the state fails to keep up.
New housing supply during 2016 to 2030 – or new commodity homes to be completed – will average around 750 million sq m per annum (assuming constant pace of completion), representing 25% downside risk to our estimated 1 billion sq m per annum of housing completion in recent years. New-home sales volume is likely to track similar levels – given that pre-sales are typically 12-18 months ahead of completion.
The Special Report “China Residential Property Market Forecast (2016-2030)” is available at www.fitchratings.com or by clicking the link above.