People's Daily Warns 3rd and 4th Tier Home Prices Will Fall in 2015

The People's Daily is warning that home prices will decline again in 2015 for cities with overstuffed inventory.

Even though first tier cities have seen stabilization in prices and a bounce in rebound, there's no real rebound taking place due to high inventory, says the head researcher at Shanghai E-House Real Estate. The oft quoted Zhang Dawei of Centaline sees sales potentially stabilizing in Q4, but prices may not bottom out until Q1 in 2015.
Along with a rebound in first tier prices, differentiation in the national property market will become increasingly clear.
From October: Local Officials Want A Third Bailout as Mortgage Easing Impact Muted and earlier this month: A Tale of Two Tiers
Back to the People's Daily article:
"The market differentiation phenomenon is obvious, it reflects the real estate market becoming more rational." Academy of Social Sciences Research Associate Chen Fei explains: on the one hand it's due to housing price fluctuations reflecting the differences in different levels of urban, economic and social development, and quality of public services, which reflects the consumer being more rational; on the other hand, the national real estate policy of promoting stability is gradually squeezing speculation out of third- and fourth-tier cities.

In sum, first-tier cities and the upper crust of second-tier cities appear to be in good shape, but for many of the second-, third- and fourth-tier cities, price increases are unlikely in 2015.

Source: 人民日报预测房价:三四线房价下跌概率大 (People's Daily: Probability of Third- & Fourth-Tier Home Price Decline High)

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