As the real estate market undergoes profound adjustments throughout 2023 amidst weak overall demand and cautious sentiment, Savills anticipates a gradual recovery in 2024. The market is poised to witness encouraging policies aimed at restoring confidence and shaping positive expectations. The newly released Savills China Real Estate Outlook 2024 provides insightful analysis into the upcoming trends in China's dynamic property market.

Living: Are further declines expected in 2024?
The residential sales market is undergoing significant reforms on the supply side, particularly with the implementation of a dual-track system encompassing social and commodity housing. While this transformation may take years to fully materialize, a moderate improvement in residential sales performance is expected in 2024. Core cities and capitalised developers, notably SOEs, are anticipated to lead the market.

Working: When will the office market start to recover?
Historical economic cycles, lasting approximately four to six years, give an indication as to the potential future trajectory of the recovery in the office market. The current cycle, having commenced in 2022/23, is at an early-stage and uncertainties persist. Further government stimulus will be imperative to rejuvenate the economy and instil confidence in the business sector.

Consuming: What are Chinese consumers still consuming?
Chinese consumers exhibit an increased willingness to invest both time and financial resources in experiential activities such as travel, entertainment, and dining. This shift is reflected in the rising percentage of these categories in newly leased mall spaces, creating new opportunities for the growth of exhibition spaces and art galleries.

Producing: Will 2024 witness a recovery in the logistics market?
The logistics market is expected to witness a moderation in supply levels in 2024 following a recent surge in supply. Landlords may face the challenge of sacrificing rent growth to sustain occupancy rates. Notably, western China shows signs of improvement, with a steady decline in new supply since 2020 and growing demand, albeit at a moderate pace.

Financing: Where is the next investment opportunity?
China's commercial real estate market experienced significant price adjustments across various asset classes in 2023. Investors are advised to exercise caution and patience, prioritizing assets aligned with government plans and offering stable rental income. Long-term investors may discover opportunities to acquire high-quality assets at discounted valuations, providing a buffer against future uncertainties.