Beijing Real Estate Transaction Drops During Long Weekend7 June, 2011, 13:44. Posted by Zarathustra
Tags: Beijing, Real Estate
In China real estate, the real estate market continued with its stalemate. Transaction volume in Beijing market, in particular, dropped during the Dragon Boat Festival long weekend according to Xinhua.
The transaction volume for newly constructed flats for the Saturday and Sunday of the long weekend was 242, and transaction volume for secondary market was 55. Although transaction volume increased on an year-on-year basis, it dropped 20% vs. the Qingming Festival long weekend, and dropped 73% vs. the Labour Day holiday.
This is not very surprising: we have been hearing the same kind of stories for months now. As credit tightening shows no sign of easing for now, the increasingly aggressive curbing measures have effectively capped the demand for markets like Beijing, thus transaction volumes declined. As real estate developers’ finances have gotten worse, It is only the matter of time when these developers start cutting prices to get cash flowing in. What we need is probably an event or a catalyst to trigger this. I don’t know what it would be, and I don’t know when that would happen, but things certainly do not look very good.
As the market cools, real estate agencies suffered. Earlier I have pointed out that the Hong Kong-based Midland Realty (1200.HK) has already closed all Shanghai branches, highlighting how cool the Shanghai market was. The same is probably happening for Beijing as well, as transaction volume cools affect agencies profits.