China Real Estate: Beijing Market In A Stalemate16 May, 2011, 13:35. Posted by Zarathustra
Tags: Beijing, Real Estate
While some previous reports suggested that the China’s real estate market was making strong comebacks, some latest reports suggested that it did not sustain.
Xinhua reported that the primary real estate market in Beijing has almost been ground to a halt in May. Out of 12 projects which were granted presales consents, only 1 of the projects have transactions recorded as of 15 May. Prices of these projects were flat.
According to a researcher at Shanghai Eeju, the real estate market is now in a stalemate, with “fears in all sides increasing, and all participants get anxiety disorder collectively”. Buyers are now hoping or waiting for the prices to drop, while developers are still staying firm as far as prices are concerned. An unidentified source said that there are 48 real estate projects to be sold in Beijing, 65.5% more than the previous month. Yet the discount remains pretty much the same. So as it appears, there are no shortages of supply of new apartments, yet the credit tightening and buying restrictions have curb demand sharply.
Although the economy has shown some signs of slowdown now, the government’s determination on curbing home prices and slowing inflation seems to be as strong as ever. As real estate developers’ profits drop while inventories and debts rise, the key question now appears to be for how long can these developers hold longer before they have no choice but to cut prices to cash in. And when that happens, we will finally see some meaningful corrections in the China real estate market.