[The Epoch Times, April 20, 2022](Comprehensive report by The Epoch Times reporter Chen Ting) According to Reuters,ChinaSmall cities are widely facingreal estateThe recession, which not only eroded the wealth of tens of millions of households, was a blow to the fragile confidence of Chinese consumers, which in turn dampened general consumer spending.
The report cited statistics from the Chinese authorities on 70 large and medium-sized cities. The smaller cities have been hit by falling house prices for seven straight months since September, the data showed. However, this is just the tip of the iceberg.
Reuters pointed out that the CCP’s data does not fully reflect the situation of about 300 cities below the third tier.real estateThe predicament also excludes the 2,000 smaller county-level cities and 40,000 towns.
In 2021, Chinese authorities imposed lending restrictions on indebted developers, triggering a liquidity crisis that sent homebuyers’ sentiments broadly down. At the end of last year, nationwide house prices fell for the first time since 2015.
The negative wealth effect brought about by the depreciation of housing prices has hit consumer confidence and even suppressed the consumption of general commodities such as clothing.
In addition, due to the recent outbreak of COVID-19, the CCP authorities adhered to the “zero policy” and locked down many cities, disrupting the local economy. National retail sales fell in March for the first time since 2020, while unemployment in 31 major cities also hit records.
In the first quarter of this year, China’s overall per capita consumption grew by 5.7% year-on-year, a sharp slowdown from the 17.6% increase in the previous quarter. Homeowners with mortgages or those facing uncertain job prospects have begun to rein in spending.
“I would think twice before buying anything now,” Shi, from Langfang, Hebei province, told Reuters. “We don’t travel anymore, we don’t even visit our parents in our hometown.”
Ms Shi, who owns a hair salon and bought a house a few years ago, has been hit by falling valuations even as monthly mortgage payments remain the same.
“I’m worried about my mortgage because the city has been locked down for a long time and (my income) is negative and business is not good,” she said.
According to a private survey in 2019,lower tier cities(lower-tier cities) About 22% of homeowners need to pay mortgages, which is equivalent to tens of millions of households; 41% of homeowners who do not have a mortgage are still affected by asset depreciation.
Mortgage loans outstanding at the end of March stood at 38.8 trillion yuan ($6.1 trillion), a central bank official said last week.
The 36-year-old delivery truck driver surnamed Sun said he bought a home in Linyi, a third-tier city in Shandong province, whose value had fallen since 2021, but his mortgage repayment rate remained in line with original estimates. value hook.
“I really don’t want this property anymore, I don’t want to suffer,” Mr Sun said. He is married and has two children. He has stopped buying new clothes and has cut down on cigarette consumption.
According to the China Index Academy, a research firm, new home prices in Linyi recorded zero monthly growth in March, marking the fifth month that growth has stagnated or fallen.
In value terms, new home prices in Linyi have fallen back to mid-2021 levels.
On Weibo in recent days, more than 60 million people have viewed social media posts with the hashtag “deferred mortgage payment”.
In a market with oversupply and a chronic outflow of residents, China, analysts saysmall cityreal estate looks set to struggle to recover this year.
“People’s confidence in these (low-tier) markets has disappeared,” said Zhang Dawei, chief analyst at Centaline Property. “No one dares to buy a house.”
Responsible editor: Ye Ziwei#