ISTANBUL
China’s average annual housing demand is expected to decrease over the 2024-2040 period, according to Fitch Ratings.
New housing demand in the world’s second-biggest economy is projected to drop to around 800 million square meters per year on average over that period, it said in a report on Sunday.
The main reasons behind the projection are adverse demographic shifts, slower urbanization, and diminishing numbers and size of urban renewal projects, it added.
Fitch said its projection suggests a 33% decline from the actual average demand of 1.2 billion square meters per year from the 2011-2020 period.
“We expect, in the long run, 600 million square meters of annual demand may be fulfilled by new private housing, with the remaining demand met by public rental housing and existing housing stocks,” said the report. “This is below the 948 million square meters of new private homes sold in 2023, indicating sector consolidation may continue in the medium term.”
“That said, local governments may acquire private homes from developers and convert them into rental housing, cushioning the sales decline in the near future,” it added.
The rating agency noted that its forecast considers fundamental housing demand including purchases for self-use and rentals.
