China's 2022 property sector outlook worsens

BEIJING, Sept 05 (Reuters): Woes in China's residential property market are expected to deepen this year as homebuyers remain cautious, with economists now expecting home prices to fall in 2022 and betting on a faster drop in property sales than previously forecast.

New home prices are expected to fall 1.4 per cent in 2022, according to a Reuters survey of more than 10 analysts and economists polled between Aug. 29 and Sept. 2. In the May quarterly survey, analysts had expected prices to remain unchanged for the year.

Property sales were seen slumping 24.5 per cent in 2022, a far bigger drop than the 10 per cent fall forecast in the May poll.

The property sector, which accounts for about a quarter of China's economy, has lurched from crisis to crisis since the summer of 2020 after regulators stepped in to cut excess leverage, causing some developers to default on their debts and struggle to complete projects, resulting in homebuyers threatening to stop making payments.

The struggling sector is weighing on the outlook for the world's second-biggest economy, which narrowly escaped a contraction in the second quarter due to widespread COVID-19 lockdowns.