Government to Continue with Property Tightening Measures
As the government continues to implement measures on property tightening, leading real estate brokerages are starting to close down several of their outlets because of a slump in transactions and the decrease in prices of pre-owned homes that hit a record low for this year.
Centaline Property Agency Ltd in Shenzhen has already announced its plan to close down 60 of its outlets subsequently laying off around a thousand of its employees nationwide. Not only brokerages in Shenzhen are closing, other cities like Beijing are also facing shutdowns of brokerage firms. Century 21 Real Estate has also closed 34 outlets located in different locations around the country.
The major reason for the wave of shutdowns in real estate brokerages can be attributed to the recent slump in transactions. The first three quarters saw only 8,000 transactions of pre-owned houses, which is lower than the previous 10,000 units last year and the worst performance since 2009. Prices of pre-owned houses also decreased by 3.2 percent in October, which is a decrease of 6.7 percent since January. Many believe that the dip in home prices is largely due to the implementation of home restriction policies by the government.
The government stresses that there will be no possibility of loosening any real estate polices or loosening their tight housing measures until they see property prices fall to a much more reasonable level. This, accompanied with plummeting sales and financial difficulties, the real estate industry might reshuffle itself to gain back what they might have lost.