Tools: Save | Print | E-mail | Most Read
Growth of Real Estate Price to Slow Down
Adjust font size:

According to an Economic Information Daily report on April 3, the four-year fast growth of real estate prices will slow down from the second half of this year. This is predicted in a survey on the financial security of China's real estate, which was conducted by the Financial Research Center of Beijing Normal University.

The survey points out that 70 percent of residents in urban areas simply don't have the purchasing power and between 80-90 percent of real estate developers could find themselves in difficulties over the next few years.

The survey shows that the year 2002 was a watershed in China's real estate business as the speed of sales has since failed to keep pace with investment. A lot of capital was invested in property but signals in that year indicated a downturn in the market.

The gap between the rates of construction and sale has grown significantly in the past few years and many properties have been left empty. In 2003, such properties measured about 128 million square meters and in 2004 that figure stood at 123 million square meters. As a result, around 423.8 billion yuan (US$52.975 billion) in capital investments was locked up in 2004. This phenomenon emerged mainly in the coastal towns and cities.

Over the past three years the average real estate price in the eastern part of China has reached about 4,000 yuan (US$800) per square meter. It is much higher in some big cities including Beijing, Shanghai and Nanjing.

According to the survey, the average annual income of an urban family is about 15,000 to 17,000 yuan (US$1,875 to 2,125). Such high property prices mean that at least 70 percent of urban residents simply don't have the buying power to enter the market.

Zhong Wei, director of the Financial Research Center, holds the view that current market trend, developers' balance statements and keen competition in the business have all indicated a slowdown in the growth of the real estate industry.

He said that 90 percent of the middle and small developers would possibly be excluded from the market since foreign enterprises would be admitted into China's real estate industry this year.

According to him, urban residents should consider purchasing second-hand housing and the government should come up with policies to gradually meet the growing demand of people from all levels of society.

( by Wang Ke, April 4, 2006)

Tools: Save | Print | E-mail | Most Read

Related Stories
Beijing House Prices Up 17.3% in First Two Months
Shipping Group Gives up Interest in Real Estate Firm
Survey Finds Housing Sector at All-time Low
Less Rural Residents Planning to Buy Houses in Near Future: Survey
Firm to Triple China Property Investment
Beijing Real Estate Investment Growth Slows down
China to Host First International Real Estate Conference

Product Directory
China Search
Country Search
Hot Buys
SiteMap | About Us | RSS | Newsletter | Feedback
Copyright © All Rights Reserved     E-mail: Tel: 86-10-88828000 京ICP证 040089号