Source: CCTV.com

01-06-2008 13:30

China's property market has gotten chilly just like the weather in many cities across the country. In Beijing and Shanghai, property transaction has dropped for three consecutive months as of December, some by as much as 20 to 30 percent.

The real estate market cools off in Beijing, Shanghai  and other previously red-hot property markets in China.

Beijing's winter has been around zero degree. However, some real estate agents are still standing outside to woo customers.

Wang Feiqin, manager 21 Century Real Estate, said, "As you can see, we have staff outside the office even though it's very cold. That's how hard we're trying to find customers. It's a reflection of the sentiment of the market."

Some real estate agents say, they feel cold not only because of the weather, but also because of the lack of activity in the property market.

Hu Jinghui, vice president 515J Real Estate Agency, said, "Transaction numbers have clearly been falling Beijing's property activity last month shrank by one third compared to November."

The plummeting number of transactions is also evident in Shanghai and Shenzhen.

At the same time, property price increases have also lost momentum. December recorded a three percent inflation over the month of November, far less than the eight percent level for the year. Analysts say, the inflexion point for some cities' property market may soon appear. They say property prices may fall in 2008, especially in Guangzhou and Shenzhen.

Li Wenjie, deputy chairman Beijing Real Estate Agency Association, said, "Guangzhou and Shenzhen have a very high proportion of investors in the property market, over 60 percent. Because of that, there are price bubbles due to speculation. We forecast the property prices in the two cities may drop as much as 20 percent this year."

However, experts say for Beijing and Shanghai real estate markets, only around 20 percent are investing, while more than 70 percent are buying to meet their own needs. Therefore prices are likely to rise steadily in the future. However, there will still be some variables.

Yin Zhongli, deputy director Financial Market Research Institute, CASS, said, "If the stock market in 2008 keeps climbing, it will have a big impact on the property price. And if CPI also rises further to exceed 7 percent, the central bank would have stricter policies on financing. That would in turn, significantly affect the property market."

Experts say since the CPI and performance of stock market have yet to unfold, the property trend for 2008 remains uncertain for now.

 

Editor:Du Xiaodan