China's subsequent recovery bright spot is "real estate"?

China's consumption of luxury goods is recovering strongly, discretionary consumption is recovering well, and real estate is showing signs of recovery, but it will take time for the overall improvement.

Regarding the current consumption situation in China, in terms of high-end luxury consumption, we have seen a relatively strong recovery; as for the low-end market, such as bubble tea and hot pot, we have also seen a good recovery.

At the same time, Bain Consulting said that China's luxury market would decline by 10% in 2022, the first decline in five years. However, the firm is bullish on China's recovery prospects, saying growth will recover in 2023.

The strong recovery momentum can be seen from the excellent performance of LVMH in the first year. LVMH's revenue growth rate in the first quarter was almost twice that of market expectations. In the quarter, revenue in Asian markets, excluding Japan, surged 37% year-on-year. The payment of boutique retail, the fastest growing among the leading businesses, increased by 30% in the current quarter. Among them, duty-free shops in Hong Kong and Macau benefited from the gradual return of tourists.

However, it will take time for overall consumption to improve. According to data released by the National Bureau of Statistics on Tuesday, China's CPI rose 0.7% year-on-year in March, hovering at the lowest level since September 2021.

One area that will give market watchers more confidence from April to June will be the real estate sector, where a recovery in existing and new home sales continues:

If the housing market continues to recover strongly, we might be in a good year for a full economic recovery.

However, the rebound in the housing market may take longer than hoped.

Big-ticket items, car sales first, real estate later. Because the first thing people start spending is not buying a house, the real estate industry will naturally rebound later. Let's give it more time.