Home prices on the mainland will not recover until 2011 after they have fallen to a reasonable level, according to property consultant DTZ.
DTZ’s latest report shows residential prices in first-tier cities fell 16 per cent in the last quarter of last year, while prices in second-tier cities slid 11 per cent.
Alan Chiang Sheung-lai, the head of residential at DTZ’s mainland division, expects prices in first-tier cities to drop 10 per cent this year and 5 per cent next. Those in second-tier cities will fall 8 per cent and 4 per cent, respectively.
“Some developers, particularly in second-tier cities, are not willing to cut asking prices. They have the false hope that the property market can be revitalised solely by government policies,” Mr. Chiang said.
He said the residential market would rebound 2011 at the earliest after the economy recovered and property prices dropped to a reasonable level. Home sales fell 20 per cent to 550 million square metres last year as many cities grappled with oversupply. DTZ estimated it would take six months to absorb the stocks in first-tier cities and 16 months in second-tier cities.
Edward Cheung, the chief executive of the firm’s mainland division, yesterday said the office market had been also hit by rising supply. “Office rents in major cities have fallen back to the level in 2007,” he said.
Office rents in Shanghai, the mainland’s financial hub, dropped 12.6 per cent in the fourth quarter last year, the biggest among all key cities.
Vacancy rate in Shanghai is expected to rise sharply next year as the city will see up to 2.28 million sqmetres of new supply between now and then.
David Ji, DTZ’s head of research for North Asia, expects office rents in Shanghai to drop 5 to 10 per cent this year, while those in Beijing will fall 7 to 10 per cent.
Retail rents in major cities might drop 5 to 8 per cent this year, Mr. Ji said.
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DTZ Says Home Values to Stage Recovery in 2011
Yvonne Liu
15 January 2009
Home prices on the mainland will not recover until 2011 after they have fallen to a reasonable level, according to property consultant DTZ.
DTZ’s latest report shows residential prices in first-tier cities fell 16 per cent in the last quarter of last year, while prices in second-tier cities slid 11 per cent.
Alan Chiang Sheung-lai, the head of residential at DTZ’s mainland division, expects prices in first-tier cities to drop 10 per cent this year and 5 per cent next. Those in second-tier cities will fall 8 per cent and 4 per cent, respectively.
“Some developers, particularly in second-tier cities, are not willing to cut asking prices. They have the false hope that the property market can be revitalised solely by government policies,” Mr. Chiang said.
He said the residential market would rebound 2011 at the earliest after the economy recovered and property prices dropped to a reasonable level. Home sales fell 20 per cent to 550 million square metres last year as many cities grappled with oversupply. DTZ estimated it would take six months to absorb the stocks in first-tier cities and 16 months in second-tier cities.
Edward Cheung, the chief executive of the firm’s mainland division, yesterday said the office market had been also hit by rising supply. “Office rents in major cities have fallen back to the level in 2007,” he said.
Office rents in Shanghai, the mainland’s financial hub, dropped 12.6 per cent in the fourth quarter last year, the biggest among all key cities.
Vacancy rate in Shanghai is expected to rise sharply next year as the city will see up to 2.28 million sqmetres of new supply between now and then.
David Ji, DTZ’s head of research for North Asia, expects office rents in Shanghai to drop 5 to 10 per cent this year, while those in Beijing will fall 7 to 10 per cent.
Retail rents in major cities might drop 5 to 8 per cent this year, Mr. Ji said.
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