Chinese government tightening and regulatory uncertainty is surely having effect on the nation’s real estate industry, at the very least psychologically.
That’s because China’s measure of entrepreneurial confidence for the real estate industry plummeted in Q2, to an index level of 109.3 vs. 132.3 in Q1 according to the National Bureau of Statistics. This is a huge drop for just one quarter.
While real estate confidence was by far the worst hit, confidence in some other industries wasn’t spared either, such as in retail, and overall, China’s entrepreneurial confidence index (ECI) for all industries slipped to 133 in Q2, vs. 135.5 previously. Moreover, the ECI fell for large, medium, and even small industry segments surveyed.
Note that the broad ECI had hit a low of 94.6 in Q4 2008, so overall confidence remains strong despite the recent slip. Yet the same can’t be said for real estate, where it’s fallen like a stone.