Not enough’
Macquarie’s global economists Larry Hu and Yuxiao Zhang wrote in a note on Thursday that the measures “may not be enough to turn the housing market around.” The note added that it would have been better if authorities had expanded a program announced in May that would allow the government to act as the buyer of last resort in the housing market.
China’s real estate sector was estimated to account for as much as a third of the country’s economy just a few years ago. But the sector has been in a slump since Beijing cracked down on developers’ high level of debt in 2020.
The yearslong crackdown has affected home prices, which in turn has affected consumer confidence as about 70% of the country’s household wealth is parked in real estate. Potential buyers may also hold off on purchases if they expect home prices to continue dropping, which in turn affects developers who are dependent on sales revenue. Macquarie estimates sales revenue makes up about 45% of total developer funding.
But while many analysts were disappointed, some viewed Thursday’s announcement as taking a more “pragmatic stance.”
finance.yahoo.com/news/china-unveiled-more-stimulus-actions-120237677.html