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Breaking News - China’s property market encountered a severe winter

After the Chinese New Year, turnover of property markets in China continued to shrink. In Beijing, Shanghai and Shenzhen property markets, the old and new property prices fell across the board. The Real estate industry said that the impact is due to bank credit tightening policies. Investors cannot handle the pressure from the rising costs in investment funds, and they undersell. As for the influence of the real estate bubble economy psychological impact, the buying is low.

It has been reported that in 2007, the central bank of the Chinese Communist Party has increased interest rates six times. For more than five years of loan, the rate rose to 7.83 percent, and there is pressure that interest rates continue to increase. Mr Ji is a mainland real estate agent, and said that many people are buying a property not for living in but for the sake of its own value-added, and the loan of investors’ cost of capital increase, resulting in repayment difficulty or undersell.

Mr Ji said “it is mainly affected by the national policy, monetary policy and bank credit impact. The government regulation of the banking currency impact on property prices, mortgage interest rates increase, and also property loan condition is more stringent. It is more difficult to get a bank loan for many investors.”

Zhang Wei, a responsible person for Centreline Property Research Centre for Hong Kong and Shenzhen, said that in 2008 credit support investment demand will be less, and the rising prices situation will not occur again. Mr Chu from Shenzhen said that the property prices are falsely stirring upward; in fact there are many empty properties.

Mr Chu said “Real Estate fell, there is no body buying, it is created by people who falsely stir up the price, and they stirred it up too high and now they cannot sell it. No one dares to buy it. There are many vacant buildings on this side.”

According to relevant mainland statistical data, it shows that on 15th to 21st of February, the average price of the Shanghai commodity new residential properties turnover had sharply dropped to 34.89% compared to the previous week. Since April last year, it was the first time the prices dropped to 10,000 yuan RMB per square meter. In February, the Beijing real estate promoted the new properties, and 70% of the sales was zero. There are very few buyers and even Shenzhen properties undersell.

The above news is brought to you by Lu Fang Xiong Bin, and hosted by Chris Thomas for Breaking News on the SOH Radio Network