[photopress:property_shenzhen.jpg,full,alignright]Government measures are beginning to work is suggested by the fact the real-estate market in southern China’s two largest cities are easing.
Discounts are being offered — always a sure sign of slipping market — and some investors are wondering whether weakness in China’s south might just be the start of the first nationwide downturn in housing prices since private homeownership became a reality in China in the late 1990s.
Prices for new homes in Shenzhen dropped 8% from September to the end of the year. In nearby Guangzhou — China’s third-largest city, behind Beijing and Shanghai — prices for new homes fell 9.9% in November from a previous high of RMB11, 574 ($1,600) a square meter in October.
This is not yet a slump but a distinct warning that a readjustment is in place and that many over-priced properties will be hard to move.
A sharper or broader property downturn in China could shake investor confidence which would, in turn, pressure the stock market and take so much heat out of the economy it will feel positively chilly.
Mei Jianping, a professor of finance and a real-estate specialist at the Cheung Kong Graduate School of Business in Beijing said, ‘Because inflation is higher, Chinese policy makers are increasing their resolve to curb lending. Some cities will adjust more than others, but this is going to be a nationwide phenomenon.’
Alan Chiang, the Shenzhen-based head of mainland China residential property at real-estate broker DTZ said, ‘We still have a very, very long road to go on urbanization.’
Perhaps. Possibly. Maybe. But the daft prices of recent years may be in for an adjustment. Not a slump as shown by the collapse of the sub-prime — shonky loan — market in the United States. But an adjustment. How strong no one yet knows. But many speculators may lose serious money. It will be difficult to cry for their fate. For more on this click on Source.
Source: Fair Cost Housing