The gloomy performance of Shanghai’s property market has discouraged investment in the sector, say local experts.
Chenzhong Xiaolu, Caijing 14 January 2009
During the first ten months of 2008, sales of newly built commercial housing in Shanghai dropped 40.4 percent year on year, while sales of old properties declined 22 percent, according to statistics from the municipal government.
By the end of October, Shanghai’s unused housing space had shot up 10 percent from the previous month, and was 19.7 percent higher than in the beginning of 2008.
The sluggish market has cut into investments. Fixed asset investments had only grown 5.6 percent year on year at the close of October, much lower than the 27.2 percent national average. Total investment in the property market only increased 3.6 percent.
Lower fixed asset investments will directly affect the city’s economic development, said a local expert in the city government.
According to the municipal statistics bureau, the distressed property market shaved off 0.4 percent from the city’s GDP growth in the first half of 2008. “More importantly, it has offset Shanghai’s efforts to resist the financial crisis,” said the expert. The Shanghai government has released a series of stimulus policies since October, including favourable terms for housing loan, tax adjustment and government housing purchases.
However, the latest statistics show that, although the stimulus policies encouraged sales in November and December, growth was far lower than the same period the previous year. In November, for instance, housing sales were only 55 percent what they were in November 2007, and 36 percent of the 2006 figure.
A report issued by Shanghai Chinese People’s Political Consultative Conference on January 13 forecast that the city’s property market would face a tough spring this year, with developers under capital pressures and market demand low.
A quick recovery seems very unlikely, said the report, due to worsening economic conditions and consumer caution.
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Investment Slows in Shanghai Property Market
The gloomy performance of Shanghai’s property market has discouraged investment in the sector, say local experts.
Chenzhong Xiaolu, Caijing
14 January 2009
During the first ten months of 2008, sales of newly built commercial housing in Shanghai dropped 40.4 percent year on year, while sales of old properties declined 22 percent, according to statistics from the municipal government.
By the end of October, Shanghai’s unused housing space had shot up 10 percent from the previous month, and was 19.7 percent higher than in the beginning of 2008.
The sluggish market has cut into investments. Fixed asset investments had only grown 5.6 percent year on year at the close of October, much lower than the 27.2 percent national average. Total investment in the property market only increased 3.6 percent.
Lower fixed asset investments will directly affect the city’s economic development, said a local expert in the city government.
According to the municipal statistics bureau, the distressed property market shaved off 0.4 percent from the city’s GDP growth in the first half of 2008. “More importantly, it has offset Shanghai’s efforts to resist the financial crisis,” said the expert.
The Shanghai government has released a series of stimulus policies since October, including favourable terms for housing loan, tax adjustment and government housing purchases.
However, the latest statistics show that, although the stimulus policies encouraged sales in November and December, growth was far lower than the same period the previous year. In November, for instance, housing sales were only 55 percent what they were in November 2007, and 36 percent of the 2006 figure.
A report issued by Shanghai Chinese People’s Political Consultative Conference on January 13 forecast that the city’s property market would face a tough spring this year, with developers under capital pressures and market demand low.
A quick recovery seems very unlikely, said the report, due to worsening economic conditions and consumer caution.
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