China Real Estate: Home Prices In Beijing Dropped By 10%?2 May, 2011, 13:58. Posted by Zarathustra
Tags: Beijing, Real Estate
One can always be sceptical about every official statistics that China published. If the official ones are not reliable, perhaps you can look at some statistics from private companies.
So the state media Xinhua was quick to report a statistics compiled by a real estate agency, which shows that property prices in Beijing has dropped by 10% after the latest round of real estate prices curbing measures were announced. According to Homelink, primary market prices dropped from RMB24,945 per square meter to RMB22,512 per square meter, while prices in secondary market dropped from RMB19,850 per square meter to RMB19,811 per square meter.
Although Xinhua ran with the headline that prices fell by 10%, it is clear that only new home prices have dropped that much, while the prices of existing homes haven’t really moved. Closer look at the report also suggested that new homes prices fell 10% mainly because many of the new projects on sale in April were located in fringe area of Beijing, further away from the central Beijing. Also, one particular project has price restriction, making its price some 20% lower than nearby properties. So on the whole, the real correction in home prices has not really happened yet.
On the whole, perhaps transaction volume is lower and prices have been softened a bit. Even if property prices is due for a big correction, however, this is only just the beginning at best.