Housing: First Tier Hot, Everyone Else Not

China Economic Review: China's residential property glut is going nowhere fast
Records for second-hand home prices going back to August of last year appear to echo the primary market: Tier-1 housing broke away from the pack late in 2014 and at last count had seen cumulative gains of over 10%. Tier-2 valuations have steadily climbed their way back into positive territory after hitting bottom in early in 2015. But used home prices in the third and fourth tiers have failed to do the same, with the latter down close to 4% at the start of October.

That dip may stem from the volume of second-hand housing listed for sale in fourth-tier cities, which appears to have risen dramatically in recent months. While used floor space on offer from all tiers saw gradual, similar gains after bottoming out in February, volumes listed in first and second-tier cities have risen only moderately compared to the sudden surge in third- and especially fourth-tier cities, which began about halfway through 2015.

iFeng has an article discussing the bifurcated market, the headline says it all: 楼市已不正常:三四线陷入泥潭一线火得不得了 First-tier extremely hot, third and fourth tiers trapped in a quagmire. This extends to the all important land market which funds local government investment.

No comments:

Post a Comment