First Shenzhen, now Beijing. The real estate bubble is deflating, if not bursting. Translated by CDT from CCTV’s “Economics Half Hour (经济半小时)” program:
In China’s booming cities, real estate agents can consider themselves as white-collar workers, making tens of thousands of yuan a month. But that’s when the market is rosy. Now Beijing and its real estate market are both feeling the cold of the winter before the Olympics. This is how it works: sales agents are paid a base salary of, say, 1,000 yuan a month, but there’s a bonus of .1-.3% on each property unit sold, thus boosting their income as high as tens of thousands of yuan, equivalent to many months for most wage earners. And Beijing’s housing market has sustained strong growth for quite some years, until late last year.
Beijing’s housing price index has dropped significantly in the last month of 2007: down 10% in the first week of December, another .75% in the second week, up 13% in the third but tanking 20% more in the last week, according to statistics from the China Real Estate Index Research Institute (中国房地产指数系统研究机构). At the end of last November, the average price in Beijing was 15,162 yuan per square meter. A month later, the price dropped to 12,180 yuan.
Not only did the new property market feel the cold, the second-hand market also started struggling. A real estate manager said all Beijing sales dropped by 20-30%. In December, a sales agent said they sold nothing. A survey by the People’s Bank of China of urban residents found that, in the fourth quarter, the willingness of Beijingers to buy an apartment went down seven percentage points, topping the charts of seven major cities in China. No wonder that no matter how cold the weather is, many sales agents would tough the bitterness outside of their shops to attract potential buyers. [Full Text in Chinese]
Also by CDT: Shenzhen Housing Boom Further Ices Up, Shenzhen to Herald a China Housing Meltdown?
