What’s ailing China’s housing market? A teacher, clerk and tutor show why the next home sales reports could be ugly

Home sales likely stumbled in June and will weaken in subsequent months, analysts forecast; JPMorgan sees the market stabilising at a low level after 2022’s crash

China’s policy responses may not help at all, until consumers regain confidence home prices can sustain an uptrend, Nomura says

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A woman walks near a construction site of apartment buildings in Beijing in July 2022. Photo: Reuters

Published: 8:30am, 3 Jul 2023Updated: 11:10am, 3 Jul 2023

Wang Hua is already making plans for her daughter’s education in Beijing, after delivering her second baby earlier this year. To enrol in a prestigious public school in Haidian, she would need to own a property in the district as a prerequisite.

Stressed by the impact of Covid-19 on job security and economic fallout, the teacher in her 30s is struggling with the decision, unsure of when she will start looking for one in the district, home to top primary and secondary schools and where Peking University and Tsinghua University are located.

“The pandemic has brought about too many uncertainties and I don’t feel now is the right time to buy a home,” she said, worrying about the family’s future income stability. “We will just wait until we save up enough for a decent home, rather than rushing for something small and old. We don’t want to lower our quality of life.”

That hesitation does not bode well for China’s housing market, a pillar of the economy that is cracking under the weight of shrinking demand and weaker prices. Liquidity crunches and debt defaults among the nation’s private developers, from China Evergrande Group to Kaisa Group, have dented confidence among buyers as home delivery suffered.