Along with ZCP, China’s real estate sector reopening of the economy, which will help boost was a major drag on headline growth in 2022, demand at a low level following a nearly 10% subtracting around 2%. In 2023, we expect a contraction in 2022. We believe the rebound cyclical rebound in the sector, which may boost will be restrained by the significant structural growth by slightly more than 1 percentage point challenges facing China’s real estate sector, relative to 2022. This rebound is driven by including oversupply, poor affordability, and supportive fiscal and monetary policy, stabilizing worsening demographic trends (Figure I-25). sentiment and real estate investment, and FIGURE I-25 Despite easing regulation, the housing market is unlikely to rebound because of a structural downturn a. Housing remains oversupplied in China, with increased demand providing only a slight offset to supply growth  s  t i n  g u n Supply Excess supply i s u o  f h s o n o i l l i  Demand M        b. Cyclical factors will provide near-term support to housing, but structural factors will lower demand over the next five years r % . % r a a e . ye y - - r r Real estate e e  . onv d v tio n o demand a - a - l r r  . a m a e e orecast opu y  p e ye e de t g e g a n – . agn t a - a s h g h c l e –. ine c a e k g e ag ora R t– –. t n W n e e c Demographics c r– – . r e e p– – . p    
   
 Sources: Vanguard calculations, based on data from Bloomberg, as of October 31, 2022. 31