Beijing Pre-owned Housing Surge May be Short-Lived
The surging sales of second hand houses may not sustain their surge if second-home buyers and investors do not enter the market.
Cheng Hua, Caijing 7 April 2009
Sales of existing homes in Beijing, which rose 113 percent month-on-month in March, may not sustain their surge if second-home buyers and investors do not enter the market, property brokers said.
The upturn reflects the government’s policy preference for first-time buyers in its stimulus package, allowing them to pay lower rates and make smaller down payments. The central bank also cut benchmark interest rates five times late last year to support the economy. Some local governments are offering their own special terms in addition to those mandated by the central government.
But that leaves little for the more speculative buyers which the real estate sector depends upon for boom conditions. Centaline Beijing, a second-hand property brokerage, said in a recent report that investors only accounted for 5 to 10 percent of deals concluded in March.
“The strong momentum is unlikely to persist if demand for second homes and for investment is not activated,” according to Hu Jinghui, deputy general manager of www.5i5j.com, a website specializing in the pre-owned market.
Hu noted that such homes have “advantages in price, location and instant availability” and can be priced at 70 to 80 percent of equivalent newly-developed housing.
According to Beijing Real Estate Transaction Management’s website, 19,993 pre-owned homes were sold in March, up 255 percent from a year earlier.
China’s residential property sales rose 13.1 percent year-on-year in the first two months, recovering from a 20.1 percent drop in 2008. Housing prices fell over 30 percent in some Chinese cities last year, as the economy slowed in line with the global economic downturn.
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Beijing Pre-owned Housing Surge May be Short-Lived
The surging sales of second hand houses may not sustain their surge if second-home buyers and investors do not enter the market.
Cheng Hua, Caijing
7 April 2009
Sales of existing homes in Beijing, which rose 113 percent month-on-month in March, may not sustain their surge if second-home buyers and investors do not enter the market, property brokers said.
The upturn reflects the government’s policy preference for first-time buyers in its stimulus package, allowing them to pay lower rates and make smaller down payments. The central bank also cut benchmark interest rates five times late last year to support the economy. Some local governments are offering their own special terms in addition to those mandated by the central government.
But that leaves little for the more speculative buyers which the real estate sector depends upon for boom conditions. Centaline Beijing, a second-hand property brokerage, said in a recent report that investors only accounted for 5 to 10 percent of deals concluded in March.
“The strong momentum is unlikely to persist if demand for second homes and for investment is not activated,” according to Hu Jinghui, deputy general manager of www.5i5j.com, a website specializing in the pre-owned market.
Hu noted that such homes have “advantages in price, location and instant availability” and can be priced at 70 to 80 percent of equivalent newly-developed housing.
According to Beijing Real Estate Transaction Management’s website, 19,993 pre-owned homes were sold in March, up 255 percent from a year earlier.
China’s residential property sales rose 13.1 percent year-on-year in the first two months, recovering from a 20.1 percent drop in 2008. Housing prices fell over 30 percent in some Chinese cities last year, as the economy slowed in line with the global economic downturn.
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