[photopress:property_apartments_sales.jpg,full,alignright]Real estate sales are in a static mode or shrinking. The buyers are adopting a wait-and-see policty. As a result, a drop in prices, maybe quite steep, seems more and more likely.
The average price for new construction in May in Shenzhen was RMB10,254 per square meter, lower than the price in April.
Zhong Wei, director of the Financial Research Center of Beijing Normal University, said, ‘A spontaneous price adjustment such as the housing price drop in Shenzhen has been completely unexpected, not only by real estate developers but the government also.’
In Nanjing between January and May, 19,758 houses and apartments were sold, nearly 47% fewer than the year before.
In Zhejiang Province house construction increased by 8.3% over the same period last year; sales fell by 13.9%.
In Beijing in April and May this year, new housing reached 1.865 million square meters, while turnover was only 1.707 million square meters. In April alone, supply increased by 995,000 square meters with sales of only 747,000 square meters.
Shanghai’s May new construction sales volume reached only 44.5% of the total amount in May, 2007. The total turnover was only 1.4331 million square meters, and the supply/demand ratio was 1.24:1.
[photopress:property_20yuan.600.jpg,full,alignleft]A recent report from the Economic Research Center of Renmin University. said, ‘Nationwide, in the first months of this year, 84.48 million square meters of building was completed, an increase of 20.2% over the same period last year, and the growth rate is 10.3% higher than in the same months last year. But the sales turnover was only 133.64 million square meters, a drop of 4% over the same period last year.’
Nie Meisheng, Chairman of the China Real Estate Chamber of Commerce, thinks China is now experiencing ‘real estate stagflation,’ characterized by rising prices and falling sales volumes.
Source: China Stakes