CHINA: Goldman Sachs On China Property & Policy Outlook

The US bank on property developments and the policy/CNY outlook into early 2025. 

Goldman Sachs: Property sales higher than year-ago levels: Our latest high-frequency tracker shows that both new and existing home sales are notably above year-ago levels in top-tier cities. For example, the 30-city daily new home sales have increased nearly 40% yoy and the 16-city daily existing home sales have risen more than 50% yoy. These are consistent with the views of our property equity research team and our own research that China's property market stabilization will likely be led by top-tier cities. That said, given the significant inventory overhang in lower-tier cities, property prices at the national level have further room to fall and homebuilding activity is likely to remain depressed for years to come.

Policy news: Although more details about this year's monetary and fiscal arrangements will only be unveiled at the "Two Sessions" in early March, recent policy announcements provided some clues. The Q4 Monetary Policy Committee (MPC) statement pledged to accelerate credit extension in early 2025 and to cut RRR and the policy rate at the appropriate time. Interestingly, the emphasis on FX management changed from "flexibility" (弹性) to "resilience" (韧性), suggesting a shift toward controlling the speed of depreciation upon US tariff announcements. On January 3, the National Development and Reform Commission (NDRC) held a press conference and announced that the government-subsidized consumer goods trade-in program will be expanded to products such as smart phones, computer tablets and smart watches in 2025."