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Hey savvy investors! Recently there has been some news about China’s property market showing signs of recovery. But is it really getting better, or is it just a temporary pause in a continuing crisis?

This is going to be a quick update for those of you keeping an eye on Chinese stocks or REITs like CapitaLand China Trust. I personally own some of these, including Hang Seng Tech ETF and CapitaLand China Trust, so these developments hit close to home for me too. Should we start feeling optimistic, or is there more trouble ahead?

Let’s dive in and break it down.

Before we begin, let me remind you that this post is for informational purposes only. It is not financial advice or a recommendation to buy or sell any investments. Always consult a licensed financial adviser to understand what’s suitable for your financial needs.

China’s Property Market: Stabilizing or Stumbling?

First, let’s start with some good news: China’s home prices have finally stopped falling as sharply. In fact, for the fourth straight month, the decline in prices has slowed, showing a bit of stability. New-home prices fell 5.73% year-on-year versus 6.07% a month earlier. Used-home prices fell 8.11% versus 8.54% a month ago. This has been helped by government stimulus measures that are warming up buyer sentiment.

But before we get too excited, let’s keep things real. Even though prices aren’t dropping as fast, they’re still down year-on-year. Major developers like Vanke are still dealing with big debt problems, and demand hasn’t really recovered. The government has promised more support for the property market, and many of us have been waiting until our necks have become longer and longer, but actual action has been pretty limited so far.

So, while we’re seeing signs of stabilization, a full recovery might still be a way off.

The Bigger Picture Dampener: Weak China Economy

Now, let’s look at the broader Chinese economy. News that was just out a few days ago reported growth for 2024 came in at 5%, which is one of the slowest rates in decades. Retail sales and industrial output have been weak, and things aren’t looking much better for 2025, with forecasts of just 4.4% growth.

On the brighter side, exports reached record highs this year, which is a rare win. But even that comes with its risks: global demand is slowing, and there are higher geopolitical risks from the Trump administration, so this boost may not last.

The Chinese government has rolled out some policies to stabilize growth, but analysts are saying they’re not enough to create real momentum. For now, it feels like the economy is running on fumes, and investors like us have to stay cautious.

What Does This Mean for Your Investments?

So how? What does all this mean if you’re holding Chinese stocks or REITs like CapitaLand China Trust? For the property market, it’s clear that stabilization is a step in the right direction, but it’s not enough to boost investor confidence just yet. That means REITs with exposure to China might still face headwinds in the near term.

As for the broader economy, Chinese stocks, like those in the Hang Seng Tech ETF, could face more challenges if consumer and business sentiment remains weak. However, certain sectors tied to exports might see some resilience, but the outlook is uncertain.

That’s all for today. What’s your take on China’s property market and economy? Are you feeling optimistic, or staying on the sidelines for now? Let me know in the comments! And if you found this type of short posts helpful, give it a like and subscribe for more bite-sized updates like this.

Happy investing!