China Real Estate Report 2016
BMI View: China's property market is suffering from oversupply due to years of high levels of development.
Rising demand is not sufficient to drive up rental rates. The government is restricting development activity in 2015 and 2016 in the retail sector with the aim of balancing supply and demand. E-commerce firms and foreign entrants to the markets are expected to be key drivers of demand.
China's real GDP growth has been falling since 2010 from a high of 10.6% to 6.7% in 2015 and is forecast to continue falling to 5.9% in 2016. BMI forecasts the growth in real GDP to remain at this level for the foreseeable future, coming in at a slower than normal rate for the country. Within China's economy, we highlight Shanghai and Beijing as particular centresof business and finance, which are also strongly connected to the rest of the global economy. Wuhan and Shenzhen, meanwhile, are centres of industry, construction and services. Wuhan is also the fastest growing city within China, with an average forecasted annual growth rate from 2006 to 2020 of 2.87%.
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