The Chinese government's property curbs continue to have a worsening effect on property prices according to new data, which also shows that the effects are having their intended effect as well.
According to figures from the Beijing Real Estate Association - a non-profit organization linking the nation's government with the real estate market -, the average price of a newly constructed home in Beijing in the first quarter was 12,326 Yuan per square meter, some 20.7% less than a year earlier.
However, the data also shows that 90% of the 16,000 new homes sold in the city in Q1 were bought by first time buyers, which shows that the measures have successfully curbed house price speculation according to Chen Zhi, secretary general of the association.
Data also shows that residential housing sales fell 14.2% to 18,000 in Q1, a record low since 2007. As sales continue to fall, more and more developers are being forced to slash prices; according to Chen 8 out of the top 10 house sellers in Beijing in Q1 had done so.
Chen also predicted that the Chinese housing market would continue to fall lower and discount sales would also be inevitable in the months to come. Chen said that if the nation continues to hold a tight grip on the housing market, and sales continue to suffer, that price-cuts will become inevitable for more and more developers, who are stuck between the pressure of capital turnover and the stubbornly high inventory of commercial houses.
- Thursday 12 April 2012