Logo of Phnom Penh Post newspaper Phnom Penh Post - Impact of virus on Chinese real estate market will ‘not last long’




Impact of virus on Chinese real estate market will ‘not last long’

Content image - Phnom Penh Post
Many property operators across China have suspended business at their offline sales offices in order to prevent human-to-human transmission and contain the further spread of the virus. CHINA DAILY

Impact of virus on Chinese real estate market will ‘not last long’

The Chinese real estate market is expected to see pressure from sales in the short term this year as the novel coronavirus outbreak has curbed demand and offline sales, although the impact is not likely to last over the long term, industry experts said.

The Spring Festival holiday is traditionally a warm-up season for housing, especially in third-and fourth-tier cities, as some buyers who cannot afford a house in big cities where they work may turn to their hometown instead. Real estate companies often offer discounts and promotional deals to boost sales at this time.

However, the contagious disease has restrained demand and reduced economic activities like consumption and investment, said Liaoning Provincial Academy of Social Sciences vice-president Liang Qidong.

Housing sales from migrant professionals and workers during this period will see a significant drop and the warm season may be postponed to the second quarter of this year, Zhang Bo, chief analyst of Anjuke, a Chinese property portal, told the National Business Daily.

Selling and marketing activities have also declined.

The China Real Estate Association proposed on January 26 that property operators suspend business at their offline sales offices in order to prevent human-to-human transmission and contain the further spread of the virus.

So far, more than 50 cities have answered the call, including Wuhan, the epicentre of the outbreak. The other cities include Guangzhou, Hangzhou, Chengdu and Nanjing, data from the China Index Academy showed.

About 30 provincial-level regions in the country have activated their first-level emergency response to the novel coronavirus outbreak. The suspension of group activities is a method taken by many local governments.

Real estate brands such as Country Garden, Sino-Ocean, China Jinmao, Vanke and Yuexiu have also announced the closure of their sales offices in some cities.

Liu Bo, an analyst with consultancy Roland Berger, said in the short term, the prevention and control of the outbreak would influence construction and sales of real estate projects. It would also pose challenges for property companies that rely on a high turnover rate.

“Besides, top companies may choose to give deep discounts to boost sales, which will squeeze the market space for small-and medium-sized companies,” he added.

More property operators such as China Fortune Land Development, Sunac China and Yango have turned to online marketing channels like WeChat mini-programmes so that clients can see the floor plan, photos and learn details through phone or online consulting services.

E-house China R&D Institute research director Yan Yuejin said the measure helps prevent the gathering of people and make marketing more flexible.

He added, though, that the main factor to influence the development of property market has not changed, but the temporary closures would not have a big impact on full-year sales.

Yingda Securities chief economist Li Daxiao said as the prevention and control of the novel coronavirus have entered a key period, their impact on some business activities is inevitable.

But the economist pointed out that the “adjustment of policies, as well as the steady recovery of housing sales and prices, can also be expected”.

Ji Wei, a founding managing partner of Meridian Capital, said as the outbreak has raised concerns about health and safety, industries that rely on offline interactions will be more affected in terms of revenue and cash flow.

She suggests companies adjust policies toward human resources, business focus and marketing methods to reduce the impact to a minimum.

CHINA DAILY/ASIA NEWS NETWORK

MOST VIEWED

  • Without shoes or a helmet, a young cyclist steals the show

    Pech Theara gripped the curved handlebars of his rusty old bike, planted his bare feet on its pedals and stormed as fast as he could towards the finish line. The odds were against him as the 13-year-old faced off against kids with nicer bikes at

  • Phnom Penh-Sihanoukville expressway on schedule

    The construction of the more than $1.9 billion Phnom Penh-Sihanoukville Expressway has not been delayed despite the Covid-19 pandemic, with more than 26 per cent of the project completed and expected to finish in about two years, according to Ministry of Public Works and Transport secretary of

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there

  • Cambodia lauded for fight against Covid-19

    Cambodia has drawn global accolades for its handling of the Covid-19 pandemic, with a new report finding that the Kingdom has controlled the pandemic better than any other country in Asia. Dr Takeshi Kasai, director of the World Health Organisation’s (WHO) Western Pacific region,