China’s real estate industry will keep slowing down that will ease out small property developers and restructure the industry in the years to come, a top think-tank said on December 27th, 2014.
A report by Chinese Academy of Social Sciences show 30 to 40 percent small-sized developers will be out of business in two years due to overcapacity, leading to an emerging oligopoly market formed by big players such as China Vanke and Evergrande Group.
“Big developers have maintained its growth pace in a downturn environment, which means small players are being forced out even faster,” Zou Linhua, a financial strategic researcher from Chinese Academy of Social Sciences, said at the news conference. “China’s era of big developers is coming.”
The report dismissed the possibility of a housing market crash, and predicted that the government would put in place necessary policies to shore up the market and to relax property purchase restrictions next year.
Small Developers to Phase Out