From China Business News, summary translation by CDT:
Mr. Wang, an owner of five or six properties in Shenzhen, has felt the chill running through the pioneering city’s real estate market. Wang is busy renovating a newly purchased apartment so he can rent it out and pay off the monthly mortgage. While recently doing the math on his property portfolio, he figured the total value of his apartments has gone down from 10 million yuan in June to 8 million now”a calculation based on a hypothesis that people would actually want to buy his properties.
When Wang bought his first unit, the price was 5,000 yuan per square meter. Since then, the market has shot through the roof, so to speak, with average prices rising from 9,000 yuan/square meter early this year to 15,000 a couple of months ago.
But, if the recent ice age-like cooling of the market is any indication, those days may well be at an end.
In May and June of this year, Shenzhen’s real estate sector registered record setting transaction volumes. But since then, the market has taken a sky dive. Over the National Day holiday, only 87 new apartments/properties changed hands, signaling a sharp transition from a seller’s to a buyer’s market.
One local real estate broker manager said, in the first half of this year, his firm could sell as many as 100 units a day. Now the firm sells as few as two or three per day. The firm’s business for October has shrunk to one tenth of September’s. As a result, a number of brokerages have had to lay off workers, folliwng a round of expansions just a few months ago.
Some in the industry affirm that the market has softened, but say it’s hard to say by how much. One estimated that housing prices will return to the same levels as late-2006, a 40% drop. [Full Text in Chinese]
See also Shenzhen’s Cooling Housing Boom?
