The Waning of China’s Real Estate Industry
Follow us on TWITTER: twitter.com Like us on FACEBOOK: www.facebook.com Due to changes in legislation, the real estate market in Beijing and Shenzhen has recently experienced a tidal wave of agency closures. The trend began with small to mid-size agencies then spread to larger realties, indicating that the ‘winter’ of China’s real estate market is approaching. Analysts say that the recent wave of price cuts and agency closures implies that a real estate market bubble is about to burst. Analysts say the root cause of these problems lies in China’s warped real estate policies. Those in the know were able to predict the boom and bust cycle of China’s real estate market. With the recent passage of legislation, limits are expected to be placed on home purchases in past February, As a result, China’s larger realties will experience a big hit. In Shenzhen, the monthly turnover of existing homes came in at only 2000, down 80% on a year-on-year basis. Centaline Group, a leading property agency, had to shut down many of its branch offices due to the dramatic drop in business. On November 7, Li Yaozhi, general manager of the Centaline Group in the southeast district of China, revealed to Shanghai-based Oriental Morning Post, that 60 agencies will be temporarily closed this year, with each realty losing over RMB 100000 [US755], per month, in revenue. Prior to the Centaline Group announcement, several local large realties in Shenzhen had closed their doors. According to Caixin.cn …
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