China Tells

China’s housing price might have more potential to go down rather than go up. A review of the relationship between the price of China’s national property price and Chinese real estate companies listed on A share shows such a trend. Historically the two have a fairly high positive correlation. Both experienced up and down turn in the last 5 years. In 2010, however, the real estate companies’ share price has corrected about 20% from their peak (see dotted line in the graph), while the property price has just begun to ease. Such a discrepancy implies that there might be more downside for China’s housing price to fall further in the near future. A correction of 20% to 30% from the current level is possible based on the above chart.

历史上来说，中国的房价和在A股上市的房地产企业之间有一个很相关的联系。一般来讲，房价高企，上市企业的股票价格就高涨。这种关系在过去几年皆得到了验证。从2010年开始，房价和房地产企业的股价走向发生偏差，房地产企业股价平均下跌30%，但是房价还没有怎么动。从这种情况来看，要么房价还要下跌，要么上市企业股价要回调。目前看来房价下跌的可能性更大。