China Property Sales Expected to Rise 20 Percent in 2006

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China Property Sales Expected to Rise 20 Percent in 2006

Real estate sales are expected to rise at least 20 percent in 2006, a slowdown from a 30 percent growth rate in 2005, according to China's National Development and Reform Commission (NDRC). The real estate market is in a mid-term readjustment period, NDRC says, and in the second half of 2006 it may enter a slower period that may last several years. NDRC also forecasts an increase in non-performing assets held by banks, which could squeeze out some small- and medium-sized developers due to lack of liquidity. Investment growth in the real estate sector is predicted to fall to around 16 percent in 2006, and could dip below 15 percent in the more developed eastern regions of the country. "It is not realistic to expect another boom in one or two years' time," NDRC warns.

Source: Agence France Presse (January 12, 2006);