Categorized | International

Shanghai Real Estate Struggles Hurting Some Businesses

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It seems China’s government restrictions in place to slowdown the nation’s real estate market are finally having an adverse effect in some areas of business.

With fears of a rapidly growing housing bubble, the Chinese government ruled to put in some strict restrictions so as to level out surging prices, particularly in the largest cities. The tactic that the government has taken is apparently working, as property prices are down in some of the country’s biggest cities such as Shanghai and Beijing.

However, while these government-imposed restrictions have achieved their intended purposes, they also have negatively impacted market confidence. The decrease in consumer and investor confidence has been particularly harmful to the real estate and lending markets in the growing nation.

Despite the struggles of real estate agencies and brokers, many analysts believe that the government plan may be key to avoiding a major real estate meltdown. Prices are expected to drop this year, though not at the levels that they could have if restrictions were not put into place. Surely, the government in China is using the real estate crash in the United States as one of the main reasons for their actions.

Regardless of what analysts are saying, it is clear that brokers, real estate agents, and consumers are suffering as a consequence of the restrictions that have been imposed. Some families are resorting to extreme actions to qualify for loans to purchase a larger home. In addition, many of the best real estate agents are abandoning the larger real estate firms for smaller ones where they can earn more commission.


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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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