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2026-10-26 17:11:01 Goldman Sachs said in a research report that China's property market adjustment has entered its sixth year. Most housing activity indicators this year have been far weaker than expected. Coupled with the recent policy shift from pre-sales to completed-home sales, developers are facing tighter funding conditions, implying lower property investment in the coming years. After updating its estimation model, the bank expects the property sector's share of China's real GDP to decline from around 15% currently to about 8% from 2030 onward, versus a peak of nearly 30%. The bank estimated that, through five direct channels including construction, real estate services, upstream effects, move-in related consumption and land sale-related fiscal revenue, the property sector will drag China's real GDP growth by about 1.8 ppts in 2026, slightly higher than the 1.7 ppts estimated for 2025. The drag is expected to narrow by about 0.5 ppts to 1.3 ppts in 2027, and largely fade by 2030. If indirect housing wealth effects are included, the impact on growth would be amplified, but this would not change the conclusion that the drag will gradually weaken over the coming years. The bank noted that this year's data and policies carry three major macro implications: the downturn in property construction is deeper and more prolonged than previously expected; home prices in first-tier cities such as Shanghai and Shenzhen, where inventory levels are already low, may soon stabilize, but prices in the rest of the country, especially lower-tier cities with still-high inventory, may continue to decline for several more years; based on developers' cash flow projections, residential land sales volume is expected to plunge by more than 90% between 2025 and 2035, meaning local government financing pressure is likely to persist, requiring alternative revenue sources or spending cuts to maintain fiscal sustainability.(gc/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |