The FTCR China Real Estate Index rebounded to 43.2 in December, having plummeted to 38.9 in November following central government cooling measures. December has historically been a weak month for our index, yet this was its lowest December reading on record. Our metrics for sales, supply and inquiries nevertheless all rose, albeit weakly, month-on-month. Developers’ price growth expectations also strengthened slightly, though from already elevated levels, with our data suggesting that demand continues to outstrip new supply in many cities.
- Developers reported that home sales fell month-on-month in December, albeit at a slightly slower rate.
- Our Home Sales Index rose to 40.6 from 35.9 in November.
- Owner-occupiers were the main source of demand, with 50.2 per cent of developers identifying first-time buyers as the biggest driver of sales — the largest proportion since July 2014.
- Our Inquiry Volume Index rose to 42.5 from 39 last month, though it fell sharply in first-tier cities.
- House price inflation rose again after a two-month slide.
- Our Home Price Index rose to 60.5 from 56.9 in November.
- 68.2 per cent of developers offered a discount to the list price in December, slightly more than in November, though still fewer than the average of 74.1 per cent over the preceding 12 months.
- Supply of new houses to the market fell for a third consecutive month.
- Our New Home Supply Index rose 2.2 points month-on-month, though remained solidly in negative territory at 43.3.
- The share of developers reporting sales volume increases continued to outstrip that reporting supply growth: 24.7 per cent said transactions rose, while just 15.4 per cent said supply did.
- Developers’ outlooks for sales volumes and prices both weakened for the second month in a row.
- Our Home Sales Outlook Index rose to 43.1 from 38.5 in November, with only 18.8 per cent of respondents expecting sales to rise in January.
- Our Home Price Outlook Index rose fractionally to 54 from 53.8 the previous month. Very few developers expected prices to fall in December (6.3 per cent), though the vast majority (79.5 per cent) expected prices to remain flat.
- Developers reported that access to discounted mortgages for first-time buyers tightened slightly in December: 46.7 per cent said this cohort was able to access loans below the benchmark interest rate, down from 50.8 per cent a month prior and the lowest proportion since February.
- After easing last month, mortgage discount availability was reduced for first-time buyers in first-tier markets. The share of developers reporting that buyers in these cities could, on average, borrow at below the benchmark interest rate fell to 56.8 per cent from 70.5 per cent in November. Discount mortgage access also tightened slightly in second- and third-tier cities.
- Mortgage discounts were slightly less readily available to second-time buyers, with 6.6 per cent of developers reporting such discounts, down marginally from 7.3 per cent in October.
- Sales volume growth remained negative across city tiers in December for the third consecutive month. However, our Home Sales Index rose slightly in each. Our sub-indices for second- and third-tier cities rose 5 and 5.4 points month-on-month, respectively, with that for first-tier cities rising a more moderate 2.2 points.
- Home Price indices rose across city tiers after falling for two months, suggesting that month-on-month price growth actually strengthened in December. The price sub-index for third-tier cities rebounded most sharply, up 7.1 points month-on-month to 59.8, though the first-tier one also rose strongly, up 6.8 points to 64.8.
The FTCR real estate survey is based on interviews with 300 developers in 40 cities. For further details click here.
This report contains only the headline results of the FTCR real estate survey. The full results are available on our database.
FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.