Shenzhen Investment says oversupply in property markets to continue

Shenzhen Investment, the Hong Kong-listed investment arm of Shenzhen’s municipal government, warned that oversupply in the mainland property market will continue for the next year or two, the South China Morning Post reported. "The property sector will stay low for another year as demand is weak due to inflation, tight credit and high interest rates," the firm’s president Zhang Yijun said Tuesday. The firm saw its first half profits fall by 58%, to US$37.8 million, due to a sluggish property market. Property prices in Shenzhen have fallen 30% from their September 2007 peak, to US$1,611 per square meter. But Zhang said the market would remain lackluster until prices fell to 2006 levels. Average housing prices in Shenzhen in 2006 were about US$1,465 per square meter.