A year and a half after crippling Covid-19 restrictions ended, the property crisis is just one of the deadweights dragging on China’s recovery momentum, sending ripples of unease through the country’s leaders and citizens.
In Tianjin, grandmother Wang Dongmei told AFP that in 2016, she and her daughter purchased a house near a riverside promenade for 870,000 yuan ($120,000).
It was now worth just over 600,000 yuan, she said.
“It’s the lowest the price has been in the last 10 years,” she sighed, but “we want to sell… that’s just how it is”.
Against this backdrop, the ruling Communist Party will in July hold its Third Plenum — a key meeting historically watched for signals on economic direction.
“People are more or less OK with economic downturns as long as there are sufficient policy responses,” Dan Wang, chief economist at Hang Seng Bank China, told AFP.
“Currently there are lots of uncertainties about what policymakers are going to do.”
The plenum was “highly anticipated with anxiety” in the hope it would provide answers, she said.
Reforms in key sectors such as property are already under way — in May, China cut the minimum down payment rate for first-time homebuyers and suggested it might buy up commercial real estate.
At a housing estate in Tianjin, customer manager Zhao Xin said there were signs of a slight recovery in the market, driven in part by the new measures.
“But it is not realistic to say that it will reach the same high level as before,” warned Zhao.
Property long served as a vital growth engine as China developed to become the world’s second-largest economy but in 2020, regulatory curbs on excessive borrowing and speculation narrowed access to credit.
Mounting debt and stalled construction have plagued the sector’s leading firms since.
Zhao’s project is wedged between older complexes developed by companies that have become bywords for the crisis: Evergrande, Country Garden and Vanke.
Ratings agency Fitch said recently it projects the value of new home sales will fall 15-20 percent this year, noting a “dampening trend in homebuyer sentiment”.
A sense of resigned gloom also pervaded a slim-pickings job fair in Shanghai, where candidates milled around stalls under harsh fluorescent lights.
“Because the employment environment is rather grim this year, we have to get offline and look for opportunities (in person),” said Wu Jiawen, a 25-year-old who graduated in December and was “very anxious” she was still jobless.
This month, 11.8 million students will finish university and add to the competition.
President Xi Jinping said in May that the issue of youth unemployment should be a “top priority”.
