Stock Market Downturn Affecting Housing Prices
The effects of the stock market meltdown in China is now spreading to the much overheated real estate market in Shenzhen as trading volume of the property market seen a decline since June while prices of pre owned housing dropped from 5 percent to 3.
As of the moment there are a lot more homeowners in Jindi Garden in Longhua are rushing to sell their homes in the past weeks and these homeowners are asking for a lump sum payment but so far no deals have been made. A consultant from the World Union Property in Bantian said that they are also facing the same situation and more pre owned flats are being listed for sale but only a handful of buyers are showing interest compared to a few years before. During the first week of July homeowners bidding index at Cetaline Proerty was around 63 percent with a decline of 8.3 percent compared to last’s week index and according to the agency data in Nanshan, Longhua, Bantian and southern Bao’an showed biddings falling and pressure are going to owners who raised their prices.
Although there are still customers coming in to look at properties, the high property prices are stopping businesses. One general manager of Midland realty said bidding index started to decline ever since banks tightened credit loans and buyers are required to pay higher down payments. Third quarter trading volume is expected to drop around 20 to 30 percent compared with the second quarter.
Upscale apartments are affects together with properties that have a more stable demand and buyers are now trying to get refunds on the deposits they made on several apartment purchases and homeowners are desperately trying to sell their properties. Previously the real estate market in Shenzhen is closely connected with the stock market and housing prices dropped rapidly in 2007 after the stock market took a downturn which followed by a rise in refund requests.