China government announced a cut to both China's mortgage down payment requirement and property transaction tax policy yesterday.
UBS Global Research believes this down payment requirement easing will improve affordability and thus property sales momentum.
The research house said the ongoing property downturn continues to be the key drag on slower economic activity this year. It has weakened demand for commodities and materials, as well as machinery and appliances. Softening industrial production and demand has in turn dampened industrial investment.
UBS expects further easing to come, including 1-2 rate cuts, with the next one in 2Q. Specifically with regards to the property sector, sales will likely recover somewhat thanks to policy support and so fall by only 5-10% this year, whereas property starts will deteriorate further from last year to contract 10-15% in 2015.
UBS added that the structural nature of the property downturn will be extremely difficult if not impossible to reverse. As such, it maintained its GDP growth forecast of 6.8% for 2015.
etnet榮獲HKEX Awards 2023 「最佳表現證券數據供應商」大獎► 了解詳情
