China's real estate properties market experienced a massive expansion in the past decade, but following the defaults of some real estate giants, as well as the huge drop in investor confidence that resulted from it, it is expected to see a continued decline-so much that experts are predicting growth might be impossible in the next few years.

According to Fu Linghui, director of the department of Economic Statistics at China's National Bureau of Statistics (NBS), the country's real estate market is "currently still on a decline," The Epoch Times noted.

Fu explained during a September press conference that China's real estate investment has decreased by 7.4% in the first eight months of 2022, as compared to the same period in 2021.

Lower confidence

Defaults among real estate developers, as well as the lack of "trustworthy" investment opportunities in China also contribute to this decline.

According to Japan-based current affairs commentator Qu Kai, who spoke with The Epoch Times, because China's real estate is seen as but one of the few "trustworthy" markets in the country, investors treat it as an asset instead of basing its value on how the properties are actually used. This caused China's real estate development to have strong ties with the Chinese economy.

However, the recent defaults of various developers, such as Evergrande Group, China Fortune Land Development, and more, has caused market confidence to drop "significantly."

The commentator further explained that even if developers started new projects immediately, they'd have a hard time determining the actual value of any property they will work on and eventual put up for sale.

Saturation Point

Wang Xiaolu, who serves as deputy director of China's National Economic Research Institute (NERI),

said at the 2022 Phoenix Financial Forum, also last month, that Chinese property developers will not be able to build as much as they did in previous years.

This is because, as per Wang, the property market has reached a saturation point: the residential floor area has reached 54 square meters per capita.

This meant that in order for China to reach its goal of 75% urbanization by 2035, developers will only "need to build 1.05 billion square meters annually," as compared to the average of 1.59 billion square meters they built every year for the past three years.

Northeast Securities chief economist Fu Peng, who also spoke at the forum, added that in order for China to lessen the risks linked to its massive real estate expansion in the past decade, it might be forced to let the property development sector face a decline.

"Don't fantasize about another booming real estate market period," Fu said. "Technically, the prosperous era of the property sector may be over."