Categorized | International

China Real Estate Prices Continue Decline

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Governmental policies continue to impact China’s residential real estate market. Both sales and prices continue to drop in both big city and small suburb markets across the country.

The Chinese government had originally enacted such measures limiting real estate sales so as to control skyrocketing prices, and to prevent the formation of a property bubble. However, as sales and prices continue to drop, and with developers now facing relentless struggles, analysts believe that the government’s actions may have actually created a bubble and burst it on their own.

The number of homes sold in the nation is down more than forty percent from last year, and analysts believe that number will drop even further in the next two months. The number of homes for sale on the market has hit its highest level since 2009, and may continue to grow as well.

The current market conditions have put China in a difficult position. The nation’s economy is starting to slow down, but fears of inflation in the real estate market remain high. As such, the Chinese government believes that it must continue to intervene in the real estate market. However, analysts warn that increasing interest rates to prevent growing prices could do more harm than good with the economy’s current state.

Many developers and homeowners have protested the Chinese government’s actions against the current real estate market. The number of new homes that are selling each month has essentially dropped to zero, causing developers to struggle for a source of income. Homeowners are growing frustrated, as the values of their homes begin to plummet.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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