New Homes in Shenzhen in Short Supply
The supply of new homes in Shenzhen is currently in decline as land resources are being stretched to its maximum while the insiders are expecting the supply to contract by next year. For 2013 the city has approved 46,915 new homes in 104 real estate development has 16 drop compared to last year. These developments have already combined living area to 4.7 million square meters which is below the average annual growth rate of living area in the past ten years.
Even with approvals, around 182 real estate developments with 38,700 new homes were opened to the markets showing a sales decline of 11 percent compared to 2012. Meanwhile home sales in the first quarter of the year was slow, there was a boom in the fourth quarter after the city adopted measures that boosted the home market this including loosening up home loan restriction and cutting interest rates.
These policy changes also influenced buyers in their purchasing preferences, as three bedroom homes and large properties were the most sought after in the market. Unlike first tiered cities wherein land trade is active, Shenzhen home market relies on land being emptied in urban renewal projects that have longer development cycles. Home supply in Shenzhen may default in the next three years due to a limit in land supply, but land retrieved from urban renewal will makeup for the land loss in the long run.