BEIJING, Feb 23 (Reuters) – The number of Chinese households choosing not to buy their own home rose sharply in the fourth quarter of 2022, a private survey showed, as COVID infections and lockdowns weighed on sentiment while the Property foreclosures skyrocketed as the economy slowed.
But more households are considering buying a home or investing in other assets in the next three months, according to the survey by research institute and think tank The Ant Group and Southwestern University of Finance and Economics, released Wednesday.
Stabilizing the troubled real estate sector will be a key challenge for policymakers this year as they try to ignite an economic recovery. Much depends on how quickly people will start spending again after the government abruptly lifted its tough COVID restrictions in December.
The number of families who chose to stay on the sidelines for property last quarter rose to 27.2% of respondents from 20.1% in July-October, the poll showed.
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However, it also found that 16.6% of Chinese families had plans to buy a home in the coming three months, up from 7.0% in the July-October quarter.
The survey also showed that respondents’ willingness to invest money in domestic stocks, mutual funds and foreign asset classes has increased.
The quarterly survey of over 34,000 households focuses on changes in Chinese household wealth.
China’s real estate sector, once a key engine of the world’s second-largest economy, fell into a deep slump in 2022 as indebted developers failed to complete deadlocked projects and some buyers boycotted mortgage payments. As a result, real estate investment and sales fell sharply, which weighed on real estate prices.
Foreclosures reached 606,000 units last year, up 35.7% from 2021, with the number of such properties finding buyers at auctions plummeting 14.9% year-on-year, according to calculations by a separate survey by the China Index Academy, one of the largest independent real estate companies in the country research company.
Cities with high rates of foreclosures were mainly located in central and western China and the affluent regions of the Yangtze River Delta and Pearl River Delta, according to the real estate research firm.
January saw a tentative rebound in the property sector, with house prices rising for the first time in a year, buoyed by the government’s aggressive stimulus measures late last year, lower mortgage rates and the ‘zero-COVID’ turnaround. containment policy.
However, analysts expect that a sustained recovery in the sector will not begin until the second half of this year.
In the Ant Group institutions survey, the total debt of Chinese families and all types of debt increased significantly in the fourth quarter, standing at higher levels than the same period last year.
The survey also showed that demand for consumer credit increased in the fourth quarter, although low interest rates on consumer credit have prompted many homebuyers to use the funds to prepay their existing mortgages.
Reporting by Liangping Gao and Ryan Woo; Edited by Kim Coghill
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