Categorized | International

Property Prices in China Decline Once Again

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Residential real estate prices in China fell for the fifth straight month in January, indicating that the restrictions imposed by the government are still taking their toll.

Prices dropped two-tenths of a percent in the last month throughout China, particularly in the major cities. While there has been a decline in each of the last five months in China’s residential real estate market, the drop has been fairly minimal. Some analysts predicted late last year that China could see a decline in average pricing of as much as thirty percent. Such a freefall has not been seen yet.

The Chinese government continues to stand by its housing market restrictions, and believes that the market still has a ways to go before there is a realistic correction in pricing.

While pricing is down in sixty cities in comparison to December, it actually remains higher than it was one year ago. With that being said, however, analysts believe that prices will continue to go down for as long as the current restrictions are in place.

There have been mixed reactions around the globe regarding China’s property restrictions. Many have been exceedingly critical of the restrictions since they were set into place. Others, though, have acknowledged that the impact has not nearly been as bad as they expected it to be.

Developers, though, continue to struggle, as the property curbs have severely limited their cash flow and overall business. Local governments are also facing tough times, as they typically rely on land sales as a means of generating the revenue that they need.

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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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