Categorized | International

Property Prices Fall Yet Again in China

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Residential real estate prices fell once again in China during the month of January. More than sixty-five percent of surveyed cities in China fell month-over-month. The remainder of the cities remained stable in pricing, exhibiting neither an increase nor a decrease.

 

The largest price drop in January was experienced by Wenzhou. The city experienced a decrease of six-tenths of a percentage point. Beijing and Shanghai both posted decreases of one-tenth of a percent.

 

Residential Real Estate prices in China have fallen consistently over the past year. The country implemented various price correction policies that heavily restricted lending and the purchasing of new homes. The restrictive policies were set into place to prevent the formation of a housing bubble.

 

The restrictive policies have certainly had their share of controversy, as many developers in the country have seen their businesses collapse as a result. It is unlikely that China will put an end to the price correction policies anytime soon. Economists have predicted that prices in China’s residential real estate market could fall by as much as thirty percent this year in a worst case scenario.

 

Many have feared that the restrictions could cause the nation’s entire economy to stumble, which would also cripple other economies around the world. However, China’s government has insisted on keeping the real estate restrictions in place. In fact, the central government has prohibited local governments from relaxing restrictions.

 

Prices are expected to continue falling throughout the year, and there has been no clear indication made by the Chinese government as to when they will remove the property restrictions.

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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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