Categorized | International

Chinese Property Prices Post Largest Decline This Year

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As predicted by real estate analysts across the globe, China’s residential real estate market saw its biggest decline in pricing this year in the past month. The most recent decline, which was a decrease of a quarter of a percent, marked the third straight monthly drop in pricing. The current prices are now what they were at in May of this year.

While the debate rages on as to whether or not these cuts will ultimately be effective or entirely detrimental to the nation’s economy, the Chinese government is celebrating the results. Thus far, the nation hasn’t seen the crippling effect that many real estate analysts had predicted. Rather, prices have modestly corrected themselves.

Developers are currently facing tighter restrictions when it comes to lending. As a result, investment in the property market has declined, and will likely continue to decline in the coming months.

Many of the nation’s banks still believe that a twenty to thirty percent decline in residential real estate prices is likely. They fear that such a drop will create an environment that will prompt many homeowners to engage in panic selling, thus damaging the overall health of the market even more.

After three straight months of pricing declines, analysts believe that the market is now at its tipping point, and has started to affect other industries that are indirectly tied to the real estate market. They believe that, unless the government reduces the current restrictions, the overall economic growth of China’s economy could dip below eight percent.

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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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