chinese property prices to fall sharply as govt maintains chokehold
News Posted On: 20 February 2012
With the Chinese government seemingly unwavering in its determination to maintain curbs on the once-runaway property market, despite some pretty drastic effects, experts like Zhang Dawei are predicting sharp falls of up to 20 percent this year.
"I think prices will continue to fall by 10-20 percent over the next 6-12 months," said the market research director for Centaline Property. Zhang believes that while it is obvious the market has experienced a turning point (particularly in first-tier cities), that the government will not ease up in any way on its policy of home-buying restrictions.
Recent indications affirm the opinion that there will be no let up in the foreseeable future. While, Beijing has firmly said that it will not ease up on its policies of making housing cheaper, third-tier Wuhu talked about easing such policies, but has now said that it was forced to abandon the plans.
The latest official data shows that Chinese house prices failed to grow in all 70 cities being monitored, and fell in 48 of those cities. This is the worst performance seen in the Chinese housing market for well over a year.
Meanwhile Nicole Wong, who is head of property research for the region at investment brokerage CLSA, believes that price falls will be harsher in the next few months, but that the market could be stabilised by April.
Many in the western world (and the eastern for that matter) have been surprised by the severity of the market restriction. Chinese house prices were growing at just 7% per year on average, and many believe this was sustainable given the huge population and rapid economic growth. However, the Chinese government is communist, the wealth gap in China is huge and many people were being priced out of the market -- especially in top-tier cities like Beijing.
Written by Liam Bailey
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