CHINA’S property downturn is expected to continue into the first half of 2022, with home prices and sales falling as tight credit policies and a looming property tax dampen demand, a poll showed.

The property sector, a key driver of growth in the world’s second-largest economy, has slowed sharply in recent months, with sentiment shaken by tight regulations and a growing liquidity crunch that has engulfed some of the country’s largest and most indebted developers.

Forecasts for home prices and property investment were gloomier than the last poll in August.

Average home prices are estimated to fall 1 percent in the first half of 2022, according to 14 analysts and economists surveyed from Nov. 26 to Dec. 1.

For 2021, home prices are now expected to rise 2.6 percent, down from a forecast of 3.5 percent in the last poll and following a gain of around 4.9 percent in 2020.

“The downward trend in home prices has emerged” due to tight quotas on home loans, worries about a property tax and weak demand, said Chen Shen, an analyst from Huatai Securities.

On the demand side, property sales by floor area are forecast to slump 16 percent in the first half of 2022, compared with a 27.7 percent rise in the same period this year.

The expectation for the supply-side is also gloomy, with property investment seen dropping 3 percent in the first six months of 2022, versus a 15 percent rise in the first half of this year. (SD-Agencies)