SINGAPORE — International actual property costs have largely held their very own within the face of an unprecedented financial hit from the coronavirus pandemic, says Sean Darby, world head of fairness technique at Jefferies.
“It has been maybe probably the most lucky occasions for policymakers in that we have not likely seen any vital declines in world property costs,” Darby informed CNBC’s “Street Signs Asia” on Monday.
Underlying demand in locations such because the U.S., U.Ok. and China have been “very sturdy,” Darby identified.
This has served as a “big backstop” for policymakers as they grapple with the financial meltdown of the pandemic, he mentioned. “Importantly, it has actually allowed the home banking system to be comparatively unimpaired by asset deflation.”
He mentioned Australia has been an exception and property costs there have seen a “modest decline.”
China’s ‘strong’ property gross sales
As China continues to see a robust restoration from the pandemic, some analysts have voiced concerns the Chinese property sector may be overheating.
Shares of the nation’s second-largest developer by gross sales, Evergrande, have been hit by a wave of volatility in September following the discharge of a leaked doc that raised questions over the agency’s liquidity place.
A pedestrian crosses a street in entrance of residential buildings in Beijing, China.
Qilai Shen | Bloomberg | Getty Pictures
Requested if issues over Evergrande have been consultant of the broader actual property sector in China, Darby mentioned the agency is a “actually remoted” case.
“I feel (Evergrande) represents type of the older type of managing a enterprise,” the strategist mentioned. “There’re a big quantity now of firms in China which aren’t debt-incumbered in any respect and certainly most of the state-owned or state-related property firms in China do not have a lot debt in any respect.”
“I feel the underlying property gross sales in China have been terribly strong within the first six months after Covid-19 struck,” Darby mentioned, including that the sector’s power has served as “insulation” for the Chinese language economic system.