Given the enormous volume and variety of opinions on China’s real estate market, finding a way to tabulate and compare who is predicting what should lend some clarity to the financial outlook, and happily the folks at Reuters have taken an important step in this direction with a poll of 21 different opinion leaders.
- Of the 21 respondents, 11 expected price declines of 10 per cent to 20 per cent in 2012.
- Another nine respondents thought the price decline would be less than 10 per cent and one thought prices would increase.
- Only six of 21 respondents thought China would lift the restriction on the number of homes a family can buy.
- Three out of four economists thought that might happen sometime in 2012, most likely in the second quarter.
- When asked to pick which city would see the steepest fall, 8 respondents predicted Ordos, the rich mining town in Inner Mongolia, would earn that dubious distinction, while Wenzhou and Beijing received six votes apiece.
- Wenzhou and Beijing will likely see price declines of at least 20 per cent.
- On a scale of 1-10, where 1 is extremely cheap and 10 extremely overvalued, respondents gave Chinese houses a rating of 7, indicating house prices are elevated and a likely to decline further.
While 21 respondents is hardly a comprehensive list, bringing even this many experts together can provide a good indication of where consensus exists.
In the future, we will be taking a look at the forecasts from some of the major real estate consultancies for China’s real estate market in 2012. It will be interesting not only to see who predicts what, but also to have a look back at this time in 2013 and see who came closest to hitting the mark. Watch for it here on Mingtiandi.
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