Several COVID 19 Omicron variant outbreaks in 2022 have had a major impact on production and life in general in some Chinese cities. Local governments have taken active measures to deal with the epidemic and effectively promote steady economic growth. As production and markets reopen in cities like Shanghai, we believe economic recovery is at hand.
To provide a picture of the market in mainland China after lockdown, Cushman & Wakefield Research conducted an in depth analysis of the impact of the lockdown. In this report, we analyze the following:
- The macro economy
- Government policy
- The sentiment of investors, developers and occupiers
- The real estate market
The Macro-Economy
The Q2 economy is bound to be affected by the epidemic, with estimated GDP growth to be the lowest in 2022. Q3 and Q4 GDP will be significant regarding full-year GDP growth.
The performance in the second half of the year will be the most critical factor in achieving this year’s goal. The development theme will be "Ensuring steady economic growth," with infrastructure, real estate and consumption being growth -support engines. If the epidemic is effectively contained, manufacturing, the service sector and consumption will gradually regain market dynamism in the second half of the year and help drive further economic recovery growth.
Government Policy
The government has introduced a package of economic stimulus measures, including tax cuts, the issuance of consumer vouchers to encourage consumption, and lower interest rates on house loans to boost domestic investment and consumption confidence.
Our Survey
From May 1 to May 15, 2022, Cushman & Wakefield Research conducted a questionnaire survey by interviewing executives across a broad spectrum of real estate-related enterprises in China. Through this survey, we were able to gain an understanding of the current confidence these enterprises have in the Chinese market and what their future business development strategy will be in the short- to medium-term.
Real Estate Market Outlook and Opportunities
Into Q2, real estate investment in mainland China is expected to see volume dips in certain real estate sectors while others will continue to pique investor interest.
Investment buyers will be cautious, but some will look for bargains.
Warehouses, data centers and life sciences-related real estate will continue to be looked upon favorably by investors.
Office market supply volume is expected to slow, with demand expected to rebound in H2.
Neighborhood retail and the interaction between on- and off-line shopping will be strengthened.
After the resumption of production, the logistics industry will quickly recover. Investment in warehousing space will be a focus for many investors investing in mainland China real estate.
Finally, residences with a greater amount of common area green space for activities are expected to become more popular with buyers.
