Come Undone: Shenzhen Home Prices Plunge 8.2pc

Shenzhen home prices plunged 8.2 percent in July according to the official data of the Shenzhen Planning and Land Commission. The average new home price was 56,720 yuan / square meter, down 8.2 percent from June, the largest one-month drop since 2012.

From the transaction data, the whole of July, a second-hand housing in Shenzhen lackluster trading performance, short-term stimulus effect of high-priced land is gradually subsided, coupled with the effect of superimposed off-season, market downturn.

...Present market mainly led to the new home market, however, the supply of new homes in Shenzhen in July still remain low. Shenzhen Centaline monitoring data show that in July in Shenzhen only four residential projects obtained pre-sale permits, the total of 2164 sets of sales potential, that is 229,500 square meters, area fell from ​​the previous month fell 12%, but a 9% increase in the number of properties.

...　Reduction in supply due to the downturn in market volume. Shenzhen Comprehensive Planning and Land Commission and the Shenzhen Centaline monitoring data shows that residential sales in July were 2984 units with an area of ​​309,000 square meters, decreased by 8.3% and 10.8% from June, turnover is still low.

Analysts are mostly expecting a stabilization in the housing market as credit tightening and government restrictions in various cities take effect, but there is risk of sharper price declines:

Centaline's chief analyst Zhang Dawei told the "First Financial Daily" reporters, the current first-tier cities turnover has started to slow down, some hot second-tier cities housing prices and land prices are leading. Expected in the second half, the real estate control policies continue to be applied, escalate from one city to one policy, relaxed credit policies can not be sustained in the second half, especially the fourth quarter, the real estate market risk could explode.

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