2012-03-18

China real estate roundup March 18, 2012

Beijing high-end villas extend price decline, price drops ¥2.2 million overnight (北京高端别墅降价潮蔓延 一夜降了220万元)

Comment: The high end of the market had been holding up thanks to China's wealth disparity, but now it's cracking. The price decline mentioned is roughly 20%, in line with the declines seen in the rest of the market, while there are now 11% discounts. One firm's sales staff said they lose money when property sells for less than ¥30,000/sqm, but the property in question was already down to about ¥25,000. Bad news for developers looking for high margin properties to shore up their earnings.

15% discount on mortgages, save ¥150,000 on a ¥1,000,000/20 year mortgage (首套房贷利率现8.5折优惠 100万20年期可省15万)

Comment: Banks are discounting because the government controls are shrinking the mortgage business. One bank saw business drop 70% in 2011 over 2010 numbers. A staffer at a big state-owned bank said they expect all the banks will soon offer promotions. On the positive side, the banks are competing for prime borrowers, not subprime ones. On the other hand, even prime borrowers are a greater risk if the housing market takes the economy with it.

1 comment:

  1. The whole world seems to be holding its breadth, all waiting to see how China's housing market goes.

    ReplyDelete