The Chinese government has just announced an array of policies, including tax exemption and mortgage deposits reduction, in an attempt to boost the falling real estate sector amid the global economic downturn.
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.
Dropping property prices after an unrealistic boom period are causing small speculators issues in China
“When the real estate sector was booming, every morning, the first thing I did was to think how much I’d earned. Now, the first thing I do is think how much I’ve lost,” says Liu Bin, a Shenzhen real estate investor.
“I’m in a very awkward situation. All I can do now is to rent rooms out for the money to pay bank loans.” Liu says.
Large discounts from property developers, dropping prices and a dwindling amount of transactions might be frightening away the individual investor, but seem to be attracting more groups of international investors in the Chinese property market
More on Real Estate investing in China – dropping prices attract an international crowd
Beijing – Sales of residential houses in Shenzhen are forecast to plunge this year to the level of ten years ago as homebuyers and investors continue to adopt a wait-and-see attitude as prices nosedive. Down 10% already this year.
More on Credit Crunch goes to China – Chinese Property Prices set to fall
Many individual foreigner investors are finding it difficult to buy real estate in China. Not only are foreigners faced with the not insignificant cultural and practical difficulties of buying property in China, they must also fight the recently-introduced legislation, which is designed to limit foreign ownership in order to tame the booming real estate market.
