JPMorgan survey reveals China's property crisis far from over

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JPMorgan survey reveals China's property crisis far from over
Credit: © Reuters.

A survey conducted by JPMorgan (NYSE: JPM ) has indicated that the worst of China's ongoing property crisis is yet to come. The survey, which was published on Friday, included responses from both Chinese and international investors.

The property sector in China has been facing increasing challenges in recent weeks. Major developers such as Country Garden and the state-backed Sino Ocean have been on the brink of a default similar to Evergrande's situation. The survey marked the first time JPMorgan has sought investor sentiment on this issue.

In the summary of the survey, JPMorgan analysts noted that a significant majority of investors are bearish about the property market's future. About 55% of respondents believe that the market is still at its lowest point, while only 26% think that the worst phase has passed.

Interestingly, there was no substantial difference between the views of Chinese and international investors. Around 60% of participants expect firms' share prices to rise over the next three months, albeit only 16% said they were more likely to increase their positioning.

The biggest concern among respondents was ineffective policy responses, followed by potential spillover into the banking system, a double dip in property sales, and a significant slump in home prices. Over 40% maintained a "neutral view" on whether recent support measures will be sufficient to stabilize the situation and boost property sales over the next three to six months.

As for future expectations, only 17% anticipate Beijing providing very strong stimulus. In contrast, a majority of 65% expect regional or local governments to gradually ramp up support. The findings underscore a persistent uncertainty among investors about the trajectory of China's property market amidst ongoing economic challenges.

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