2012-03-13

Beijing real estate construction plunges 40% in Jan-Feb period

Beijing floor space under construction fell 43.7% in the preceding two months. Residential construction fell 40.4%, exceeding the 38.6% drop seen in 2008. Total floor space of new developments plunged 80%, the biggest drop since 2009.

Real estate investment fell 4.6%, to 18.76 billion yuan, the first decline since June 2009. In 2009, government stimulus helped the sector recover and investment totaled 233.77 billion yuan. In 2010, that increased 24% to 290 billion yuan, and in 2011 it reached 303.6 billion yuan.

Link: 前两月北京商品房新开工面积降近八成

There's talk of a rebound in the real estate markets. Sales are picking up now that prices have slid and some areas are seeing upticks in prices. However, the media tends to grasp at straws and any positive sign is seen as a rebound. The government says prices must still come down and will maintain tight policies. Unless the central bank or anther arm of the government floods the economy with cash, it is very likely that any increases are a bump in the road and the grim statistics in the above story are a more accurate reflection of the trend in Chinese real estate.

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