It’s time to get more excited about the Chinese property sector, JP Morgan says

Real Estate

Buildings and skyscrapers in Jing’an district on October 18, 2018 in Shanghai, China.

VCG | Visual China Group | Getty Images

Home prices in China have been growing at a slower pace — but a portfolio manager at J.P. Morgan Asset Management said it’s time for investors to be more excited about the Chinese property sector.

“China goes through these mini cycles in property, and the mini cycles usually have something to do with the way government policies are working … and it looks to us in the last couple of months that that policy is again loosening a bit,” said Howard Wang, head of Greater China equities at the investment giant.

“I actually think that now is the time to get more excited about China property,” he told CNBC’s “Street Signs Asia” on Thursday.

Wang’s comments came as China’s Bureau of Statistics said on Thursday that new home prices grew at their weakest pace in 17 months in December, Reuters reported. Such a slowdown has come amid broader government measures to curb speculative buying and wean the Chinese economy off its reliance on debt, which has hit real estate demand and firms in the property sector.

But Wang said signs are now pointing to better times ahead for the Chinese property sector, at least in the short term.

“When you think holistically about China, a lot of people still need to upgrade their properties, a lot of people still need to move closer to work, move from smaller cities to bigger cities. So all kinds of macro trends are in place,” he explained.

Wang isn’t the only one who’s optimistic about the Chinese property sector. Europe’s largest bank, HSBC, said in a report last week that it sees “more upside for China property stocks” this year.

HSBC said a gradual easing in Chinese monetary policy and expectations for more lenient housing measures could boost buying sentiment. But, it warned that property developers still face a challenging environment and that “only a narrow group of players with strong execution ability” will do well.

These are the Chinese property stocks that HSBC rated as a “buy,” all of which are listed in Hong Kong:

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