DAVOS: China’s property market is no longer “red hot but deep cold”, elites gathered at the Davos forum heard on Wednesday, as fears grow that a real estate slump could accentuate slowing growth in the giant Asian economy.

“China’s urbanisation-led growth is almost coming to an end. Very little money is going into buying new land and building new buildings because so many buildings have been built,” said Zhang Xin, chief executive and co-founder of real estate giant SOHO China.

“Real estate has moved from red hot to deep cold. This is the cold, cold sector of the economy. No money wants to go into real estate,” Zhang said.

“Developers like me which used to spend so much time buying land and building buildings, now are also moving on the consumption side,” she said.

That means finding more creative ways to rent out office space, for instance.

“Can I come up with a new product that can suit the new generation, the mobile generation?” she said.

China’s property slump has fuelled fears that it could further slow economic growth at a time when the world is looking at the Asian giant to provide momentum. Chief economist at consultancy IHS, Nariman Behravesh, said: “China is going through a housing crunch and it’s bringing growth down. What we don’t know is when it will stop.”

After a decade of breakneck rises in property prices — with rates more than quadrupling in Beijing and Shanghai from 2003 and doubling across the country — the sector has recently come to a screeching halt, with prices falling in the second half of 2014.

Published in Dawn, January 22nd, 2015

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