In mid-May, Chinese authorities unveiled a range of measures aimed at stabilising the property sector, following almost four years from the implementation of the Three Red Lines policy, almost three years of slumping construction starts and property sales, over two years of falling residential property prices and the collapse of several major real estate developers. The precise goals of these policies are unclear; a return to pre-Three Red Lines trends would not be appropriate. We long argued that activity in China’s property market was unsustainable prior to 2020 and it may take several years for the sector to find a suitable equilibrium, particularly given longer term demographic trends.

For further details, please see the China Economic Update (3 June 2024)