Bank of America Foresees Continued Contraction in Chinese Real Estate Sector for Years

Bank of America Foresees Continued Contraction in Chinese Real Estate Sector for Years
This aerial photo taken on October 10, 2023 shows buildings of China’s developer Country Garden Holdings in Zhenjiang, in China’s eastern Jiangsu province. (Photo by AFP) / China OUT

The Bank of America has stated that it expects that contraction in China’s real estate sector will persist for several years, Invest-Gate reports.

The bank indicated that the lack of investor confidence in the world’s second-largest economy will continue to dampen deals in the sector. In addition, the bank suggests that the current drought in the Chinese real estate market is unlikely to end soon.

However, the Bank of America holds a positive outlook for the real estate sector in Japan. This optimism is driven by factors, such as healthy levels of inflation and the implementation of reforms by companies. These factors have attracted investors like Blackstone and Sweden’s EQT AB to the Japanese market.

Looking at the broader Asia-Pacific region, the bank expects real estate transactions to rebound in the coming year. This expectation is based on the anticipation of central banks cutting interest rates and providing greater clarity on future decisions, which could stimulate activity in the real estate market.

So far this year, mergers and acquisitions deals in the real estate sector in the Asia-Pacific region have seen a decline of approximately 39% on an annual basis, amounting to $102.3 bn. This decline reflects the current challenges and uncertainties faced by the real estate market in the region.


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