John Lam, UBS’ head of China property research and a long-time contrarian, is retreating from his earlier bullish calls and joining his Wall Street peers in predicting that the country’s four-year real estate downturn is far from over.
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Lam said he expected home prices to fall for at least another two years before a recovery in mainland China’s beleaguered residential property market could take hold. One reason was that potential buyers were increasingly opting to rent properties while prices were declining, he noted in a report earlier this month.
“People who bought homes in the past decade may all be loss making,” he said, adding that this had “fundamentally changed housing price expectations”.
The Swiss bank has turned more bearish on China’s housing market just months after Lam predicted that home prices could “turn stable” as soon as early 2026, led by a revival in top-tier cities. The long-time analyst is known for downgrading China Evergrande Group at the start of 2021, 11 months before the nation’s most indebted developer defaulted on its debt. Lam also took a bold stance last year by turning bullish on the property sector.
Global banks mostly have dim outlooks for China’s real estate sector, which has been experiencing a renewed sales slump since the second quarter. That was reflected in the steepest price declines in at least a year in October. Fitch Ratings said last month that the situation could deteriorate further next year, as new home sales by area could decline 15 per cent from their current level before the sector stabilised.
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