{"id":21692,"date":"2024-10-29T16:39:47","date_gmt":"2024-10-29T06:39:47","guid":{"rendered":"https:\/\/woodcentral.com.au\/?p=21692"},"modified":"2024-10-29T16:39:50","modified_gmt":"2024-10-29T06:39:50","slug":"chinas-new-real-estate-strategy-is-a-big-boost-for-lumber-imports","status":"publish","type":"post","link":"https:\/\/woodcentral.com.au\/chinas-new-real-estate-strategy-is-a-big-boost-for-lumber-imports\/","title":{"rendered":"China\u2019s New Real Estate Strategy is a Big Boost for Lumber Imports"},"content":{"rendered":"\n

The Chinese government announced last month stimulus measures designed to energise the country\u2019s lethargic economy, which could boost the ailing real estate sector and softwood lumber consumption.<\/p>\n\n\n\n

A struggling real estate sector has undermined China\u2019s demand for new construction this year, a trend that has created a headwind to Chinese demand for imported lumber.<\/p>\n\n\n\n

In late September, the People\u2019s Bank, the central bank of China, announced a cut in the existing mortgage rate by an average of 50 basis points. The rate cut was among a lengthy list of government moves designed to stimulate consumer spending. Other measures included subsidies for appliance and furniture purchases, financial incentives to buy electric vehicles, and programs to promote tourism.<\/p>\n\n\n\n

According to US-based FastMarkets, a cross-commodity price reporting agency that covers forest products, agriculture, metals and mining, China’s real estate sector has been contracting for the last three years.<\/p>\n\n\n\n

In 2023, China cut the rate on new mortgages by 50-100 basis points to attract new borrowers. However, last year\u2019s rate decline did not impact older mortgages, a large segment of the overall Chinese housing market. Roughly 80% of housing in China was purchased before 2023, and most of these existing mortgages still have rates above 4% and some higher than 5%.<\/p>\n\n\n\n

\"Sales
The new policy comes after Wood Central earlier this year revealed that housing sales tumbled more than 40% on the year by floor area. The figure is around 30% lower than in 2019, before the Covid-19 pandemic. (Photo Credit: 236809795 via Shutterstock Images)<\/figcaption><\/figure>\n\n\n\n

Last month, the People\u2019s Bank also announced several other measures to stabilise China\u2019s housing and stock markets. They included a 50-basis-point cut in the required reserve ratio at banks to provide more liquidity to the real estate market and lower the market interest rate.<\/p>\n\n\n\n

The bank also lowered the down payment for homebuyers from 25% to 15%, which analysts note will be especially beneficial to second-home buyers. Further, the bank will provide low-interest funds for provincial governments to repurchase land and excess houses on the market. The houses will be used as welfare housing for low-income and other groups.<\/p>\n\n\n\n

This will accelerate the destocking process and raise the real estate investment growth rate, which will translate into more demand for lumber.<\/p>\n\n\n\n

\u201cI would not expect a high rebound of real estate investment, but maybe enough to revert the negative growth in tier one and two cities, considering the low base effect,\u201d said\u00a0Central Bank president and CEO Wei Hu.<\/p><\/blockquote><\/figure>\n\n\n\n

According to Trade Data Monitor, China\u2019s softwood lumber imports declined to 11.7 million cub m through August, down 6% from a year ago. Canadian exports to China slipped 3% during that time frame, compared to a 2% decline in shipments from Russia and a 16% drop in deliveries from European suppliers.<\/p>\n\n\n\n

Total Chinese imports increased 4% in 2023 compared to the previous year, ending a decades-long plunge from record-shattering highs reached in the early 2000s. However, the momentum faded in 2024, and the slowing construction sector was one of many contributing factors.<\/p>\n\n\n\n

Canadian producers may try to ramp up exports to China in the fourth quarter and into 2025. The duty of Canadian exports to the US increased sharply earlier this year, and another hike is expected next year. The higher rate will likely make the US less profitable, leaving China a primary alternative.<\/p>\n\n\n\n

Historically, Canadian exports to China are heavy to lower grades of western spruce pine fir, while US exports to China are almost entirely southern and lodgepole pine \u2013 down 7% through August.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Chinese government announced last month stimulus measures designed to energise the country\u2019s lethargic economy, which could boost the ailing real estate sector and softwood lumber consumption. A struggling real estate sector has undermined China\u2019s demand for new construction this year, a trend that has created a headwind to Chinese demand for imported lumber. In […]<\/p>\n","protected":false},"author":1,"featured_media":21693,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[52,37,32,46,48,49,68],"tags":[],"ppma_author":[69],"class_list":{"0":"post-21692","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asia","8":"category-building-and-construction","9":"category-global-news","10":"category-industry","11":"category-mid-rise-construction","12":"category-residential","13":"category-sector"},"authors":[{"term_id":69,"user_id":1,"is_guest":0,"slug":"woodcentral","display_name":"Wood Central","avatar_url":{"url":"https:\/\/woodcentral.com.au\/wp-content\/uploads\/2023\/02\/MASTER-BRAND-MARK_POS_RGB-e1676449549955.jpg","url2x":"https:\/\/woodcentral.com.au\/wp-content\/uploads\/2023\/02\/MASTER-BRAND-MARK_POS_RGB-e1676449549955.jpg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/21692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/comments?post=21692"}],"version-history":[{"count":1,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/21692\/revisions"}],"predecessor-version":[{"id":21694,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/posts\/21692\/revisions\/21694"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/media\/21693"}],"wp:attachment":[{"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/media?parent=21692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/categories?post=21692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/tags?post=21692"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/woodcentral.com.au\/wp-json\/wp\/v2\/ppma_author?post=21692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}