2012-02-05

Chinese home price declines extend to second and third tier cities; prices down 50% in Chengdu; Vanke sales fall 40%

楼市降价向二三线城市蔓延

Prices fell about 50% in one area of Chengdu, where homes sold for 5200 yuan per sqm, in area that was selling for more than 10,000 yuan. Even at those low (?) prices, very few people showed up to look at apartments.

Also worth noting: the time line keeps getting pushed out for the real estate decline, these articles almost all say at least six months of price declines. Most estimates are 15-20% for top tier cities, down to 10% for fourth tier cities. I expect as much as 40% in parts of some top tier cities, if not in the whole city, before all is said and done. But I also have a longer timeline, the "common wisdom" in the press (mostly analysts quotes and journalist commentary) seems to be that 2013 could see prices rebound.

Vanke January home sales tumble 40 pct
In 万科高管直言:买地过多开发商将会遇大麻烦, Vanke executives also said developers who buy a lot of land will face a lot of trouble this year.

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