China Looks Set for Housing Slump

2007 was the year of the property price increase for China, but things have slowed drastically during 2008. 2007 saw the biggest residential property price increase in the world in 2007, but 2008 so far is showing falls. Official estimates are rather hard to come by, but many estate agents are predicting drops of between 10 and 30%. Transactions are down, prices are down and agents are closing offices in all the major cities.

Government lending restrictions are partly the cause, with the Chinese government determined to cool the housing markets down. The Olympics may have had a positive impression on outsiders, but the simple fact is - Industrial output was bought almost to a halt for the duration, with many roads closed and private citizens all but banned from driving in an effort to reduce pollution levels for the games. Normal service has now resumed and the aftermath is serious overbuilding. The Olympic village alone providing thousands of new apartments.

With inflation at unsustainable levels, something has to go - and that something is house prices.Even the most luxurious apartments are returning moderate yields at the moment. Global Property Guyide has an interesting look at the current state of the Chinese property market.

Olympic Village