China economic focus August 2023: policy flop fails property market
China's property market has been in recession since late 2021 but supportive measures so far have failed to revive it. Home buyers lack confidence in either property or the overall economy and are reducing their exposure to the property sector. Relaxing the housing policy in tier 1 cities could prove a fillip for property developers. However, it will only have a marginal impact on demand for construction-related commodities. The current recession will stabilise in 2024 but the negative impact on commodity demand could last until 2026. Over the medium term, slowing urbanisation means property completions will trend downwards.