China recently launched a new wave of stimulus measures, aiming to jumpstart its sluggish economy. These moves have sent waves across markets, with stock prices and home sales seeing notable shifts. But how sustainable is this surge? Let’s break it down.

Stock markets in China are rallying

The new stimulus is sparking a stock market rally in China. Since the announcement, China’s equity market has jumped more than 25%, and many believe it could keep climbing. After a slow start to 2024, Chinese stocks have finally caught some wind. Investors are piling in, and the CSI 300 Index hit highs not seen in years. But there’s a lot of uncertainty too. Analysts warn that if the stimulus fails to deliver on its promises, things could reverse quickly. The hype is real right now, but the long-term impact remains to be seen.

China stimulus and the housing market

Home sales have also surged in response to China’s recent stimulus efforts. The government has taken steps to lower mortgage rates and down payments, making it easier for people to buy homes. As a result, homebuyer visits have increased significantly, and property sales are on the rise. The housing market had been in a slump for a while, but this stimulus seems to be giving it a much-needed boost. More than 50 cities have implemented these policies, and developers are getting creative with promotions to lure buyers back.

Can China’s stimulus keep stocks going up?

While stocks are riding high now, experts warn that the momentum might not last. A lot of this rally is driven by short-term excitement and government backing. But unless the stimulus package delivers strong and consistent results, the markets could face a downturn in 2025. For now, investors are optimistic, but everyone is watching to see if Beijing will follow through with more fiscal support. The next few months will be critical to determining whether this rally has legs or if it’s just a temporary bump.

The housing sector faces more challenges

Even with the recent gains, housing sector in China is far from fully recovered. The property market, which makes up a huge part of the economy, still faces serious challenges. There is a large oversupply of homes, and it will take more than these stimulus measures to fix the underlying problems. However, the government’s willingness to tackle the housing crisis with aggressive policies is a step in the right direction. Still, many experts believe more will be needed to stabilize the market fully.

Looking forward

In summary, China’s stimulus is having a strong initial impact on both stocks and the housing market. The question now is how long it will last. Stocks are up, home sales are improving, but the broader economic picture is still unclear. Investors are hopeful but cautious. Everyone is waiting to see what the government does next to keep this momentum going. For now, China’s stimulus is making waves, but the real test is just beginning.