News release

The impact of China Central Bank's stimulus package on real estate market

Eric Pang, Head of Capital Markets, JLL China
Bruce Pang, Chief Economist and Head of Research, JLL Greater China

September 27, 2024

Vickie Zheng

Senior Manager of Marketing
+86 180 1796 2809

Shanghai, 27 September 2024 –This stimulus package represents a strategic shift in macro policy, from piecemeal policies to a highly orchestrated package, which is exactly what the market needs at this very moment. The policy makers are clearly dedicated and motivated to boost market confidence and bring in positive market impact within the short term.

Given further stimulus down the road, we expect at the minimum a short-term market uplift in response to the measures. The real estate market having been stagnant for a while, we expect to see an uptick in both investment sentiment and transaction volume in the foreseeable future.

The market sentiment has immediately started improving in response to the measures, with the Chinese yuan hitting the strongest level against dollar in over 16 months, and the A-shares rising. We expect at the minimum the market uplift to continue in the short term, with the real estate industry as one of the key beneficiaries.

While there is an improving market sentiment, given the drastic correction of the China real estate market over the past four years, it is expected that investors' pricing expectations will also quickly rise in response, which in turn result in further downward pressure on transaction volume in a market that is already relatively stagnant.

It still needs time and patience to wait for the real estate market to bottom out. And it is necessary and urgent to launch supportive measures on all fronts and as soon as possible. However, we expect property investment and construction activities to be boosted in the medium term, as the proposed policy spurs are not only shoring up home buyers' sentiment and stabilizing home sales (by lowering mortgage rates, down payment ratios and take up of the property destocking scheme, etc.), but also providing effective and efficient support package to real estate firms in terms of existing and incremental measures.

As China strives to achieve this year’s around 5% target, we see the strength (impact), frequency and synergy of the recent package of stimulus measures in the right direction and in a balanced and coordinated manner. If there is more substantial fiscal support and a pick-up in government spending as expected by investors, we think it will probably be sufficient to drive a turnaround in business confidence, market sentiment, economic activities and growth momentum. A growth rate that catches up with both the pre-pandemic level and potential trend growth could help boost demand for commercial and industrial property. Both landlords and occupiers in major growth sectors will consider switching into expansion mode for their businesses.

Apart from improving sentiment and fundamentals of the markets, we also see monetary policy pivot and the interest rate cut cycle in other major economies as an opportunity for all types of RMB-backed assets, including China’s properties. The expanded catalog of encouraged industries and reduced negative list for foreign investment, as well as “completely removing” restrictions on foreign investment in manufacturing, further market opening in previously restricted sectors, potentially enhancing FDI and overseas capital.

The mix of international capital will differ, we expect to see a larger proportion of capital and investors from EMEA and other parts of the Asia Pacific Region. 


About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 110,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.