How will Shanghai stabilise land and home prices this year?

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Shanghai Plans for 5 Per Cent Property Investment Growth Amid Market Stabilisation Efforts

Shanghai aims to achieve a 5 per cent growth in property investment for 2023, projecting an increase to approximately 523 billion yuan (RM338 billion). This target follows a 1.1 per cent contraction in the sector during 2022, a year significantly impacted by stringent Covid-19 lockdowns that affected buyer activity and construction. The city's housing authority has indicated that efforts will be directed towards stabilising land prices, home prices, and market expectations, alongside a focus on preventing and mitigating risks within the real estate sector.
Property Investment Target for 2023

The metropolitan city has set an ambitious target of 5 per cent growth in property investment for the current year. This objective is intended to leverage the real estate sector's capacity to support broader economic growth. If achieved, this would raise the total property investment within Shanghai to an estimated 523 billion yuan.
Stabilising Market Dynamics

A key focus for Shanghai's housing management bureau in 2023 will be the stabilisation of core market indicators. This includes concerted efforts to manage land prices, ensure the stability of home prices, and anchor market expectations. These measures are part of a broader strategy to foster a more predictable and secure real estate environment.
Risk Prevention and Mitigation

Beyond price stabilisation, Shanghai intends to actively address and reduce potential risks inherent in the real estate market. The housing authority's notice highlights a commitment to "prevent and defuse risks," suggesting a proactive approach to managing financial vulnerabilities and ensuring the sector's overall health.
National Context of Property Market Trends

Nationwide, property investment by developers experienced a 5.7 per cent decline in the first two months of 2023, indicating a complex market environment. While this represents a partial recovery from a steeper 12 per cent slump in December and a 10 per cent overall fall in the previous year, national statistics suggest that developers remain cautious. This caution is partly attributed to a further decline in state land sales revenue during the initial months of the year, even with increased government support aimed at alleviating financing shortages faced by developers.

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How will Shanghai stabilise land and home prices this year?

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