Housing Market Undergoes Adjustment

Beijing’s tightening mortgage policy has put a sudden brake on the overheating housing market, especially in Shenzhen, Shanghai and Beijing. But experts believe a healthy market may be possible after the Olympics. From China Daily.

China’s massive housing market is undergoing adjustment — but experts believe a healthy market may emerge.

“If the market doesn’t drop as much as people expect after the Olympic Games, prices will rally again, and will probably even rise,” said Ben Christensen, head of research for Jones Lang LaSalle Beijing. The current wait-and-see sentiment in the market does not mean housing demand is evaporating, he added.

Shenzhen’s land and housing authorities released a report on the city’s housing market that shows the average housing prices in May 2008 fell 36 percent to 11,015 yuan per square meter from the peak in October 2007 at 17,350 yuan per square meter.

“Prices are expected to drop another 10 percent as some struggling small- and medium-sized real estate developers and housing speculators are selling properties for cheap to maintain cash flow,” said Song Ding, a senior real estate analyst with China Development Institute.

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