Company news
Beijing housing market shrinks 70% in January
02/02/2010
The Beijing News has reported that the volume of sales for all homes transacted in Beijing fell by a dramatic 70% in the first three weeks of January as compared with a month earlier.
According to the newspaper, potential buyers are adopting a 'wait and see' policy while the ramifications of measures taken by the Chinese authorities to dampen speculation become more apparent.
There seems to be a prevailing view that home valuations will now correct after a runaway 2009. Indeed the prices of existing homes have already started to slip according to Beijing News, who see a switch, at least temporarily, from a sellers' to a buyers' market.
While Beijing is not representative of China as a whole, the large drop in the number of homes sold since 2010 suggests that government measures to curb surging home prices are beginning to take effect.
Chinese home prices picked up in February last year, finally hitting an 18-month high in December.
Recent data from the National Bureau of Statistics (NBS) showed median home price rose 7.8 percent in December alone, from the previous year, averaged over China's 70 most important cities.
It seems the authorities feel that housing, far from collapsing as was feared as we entered 2009, is now in danger of overheating, and have taken appropriate measures to head off rampant home price inflation at the pass.
The central government has squeezed loans, released more building land into the market, and ended tax rebates on property transactions. In addition, there is talk of interest rates being hiked on mortgages taken out on second properties.
Are the brakes now being applied too firmly to the Chinese housing market, risking another economic downturn, or 'double dip recession’?
Time will tell, but if so it proves to be, there seems nothing to stop the Chinese from re-introducing stimulus measures as and when they are required to kick start their housing market. Meanwhile, the tectonic drift in the centre of gravity of economic activity continues inexorably eastwards.
<<Back
Contact us
To speak to one of our currency specialists select your preferred route below:
Just a note to say how impressed I have been with your service. We were able to lock into a fantastic rate for our European business which means that we will realise 6.4% more revenue from it than we had budgeted in 2009. Your service was prompt and efficient and your staff helpful. I will be using you again, and I will also be recommending you to others.
Martin Crinks
Finance Manager, Travelstyle Tours Ltd
Latest Bulletin
