[photopress:property_prices_slipping.jpg,full,alignright]The fall out from the semi-collapse of the housing market in the United States is being felt all over the world.
In Britain the effect is already very noticeable and financial commentators there generally believe that the price slump will carry forward for at least a year, possibly much more.
Although China is, to a considerable extent, protected from these changes in the market the possible effect is nevertheless there. (It can be argued that as US house prices collapse so does domestic expenditure which has a chilling effect on the purchase of goods a fair percentage of which come from China.)
And, indeed, there is a chill in China’s property sector and there has been for a few months and it looks set to continue. Transaction volumes in both unfinished properties and second-hand properties are still falling.
Official figures show that in recent times week, the average daily transactions of unfinished properties in Beijing dropped by nearly 50%. And although there have been signs of recovery, the average daily transactions during two-week post-holiday period fell by 40%.
The second-hand property market is also seeing decreasing transactions with the average daily transactions down over 40%.
Add to this the government current tightening of monetary policy then consumers will remain wary and hold out for better deals.
Nie Meisheng, Chairman of China Real Estate Chamber of Commerce said ‘The current situation in the property market is a bit like that in the stock market. The downturn may last for a while. But the increasing demand in the property market hasn’t changed. The dropping transactions are just a sign that the market is rationalizing. I think it’s good for the long term.’