So it would appear that talk of “stagnation” in the China real estate market has officially ended as various bureaux implemented further cooling measures to the system. The last few months have again witnessed strong growth in both the first time and resale markets and September’s figures are rumoured to indicate that both 2nd and 3rd tier leading provincial cities are again showing strong sales. Meanwhile prices in the major cities have continued to move apace, with Shenzhen and Beijing becoming ever more expensive.
The market had appeared relatively flat until May of this year, with concerns of a housing glut in many regional towns; however the problem appears confined to 3rd and 4th tier cities and outlying suburban developments. The market is becoming stretched, with price declines still evident in these undesirable locations, developed relentlessly during the boom times, whilst availability across the market as a whole still appears strong. In international terms China’s prices are still relatively favourable and the major cities still have some space to go to reach par with international market prices although they are catching up rapidly.
Chinas housing purchasers are having for the first time to consider carefully where exactly to invest their property futures. With more limitations than ever on their purchasing ability and the market becoming increasingly complicated, just buying property is no guarantee of investment security. Finally, the old adage of “location location, location” appears set to dictate the market.