Categorized | International

Chinese Developers Will Likely Cut Prices in 2012

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As Chinese developers continue to struggle with the restrictions imposed by China’s government, many are expected to slash prices in 2012 to avoid having to close up shop. The governmental restrictions have caused housing sales to slow, thus creating a glut of inventory; As such, price drops will be necessary in order to produce much needed revenue for most developers.

While no new governmental restrictions on the housing market are expected in 2012, the current restrictions that are now in place will likely not be eased for the next year. With that said, there is no clear indication as to how much current home prices will be cut. There have been conflicting reports, as some analysts believe that the cuts may be as high as thirty percent, whereas others believe that they will be minimal at worst.

The commercial property market, for the most part, is expected to perform well, as China’s economy will remain strong throughout the next year. Office properties, though, will continue to lag behind other commercial property sectors. Office space rents will likely decline by as much as fifteen percent in the next year in China.

Retail properties, on the other hand, will continue to be one of the strongest real estate sectors in China’s property market. With the expansion of many major shopping centers expected in 2012, the retail real estate market will continue to outperform the other sectors. The growth in the retail sector will be slower than it has been due to global economic uncertainties, though it will be still be strong when compared to other property sectors in China.

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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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