Drastic fall in Shenzhen homes prices ruled out
New property deals in steep decline as tough housing curbs bite and investors look overseas
As proper ty de velopers and speculators in Shenzhen strive to weather a “freezing winter” amid harsh government policies and a weakening yuan, analysts expect the market to remain gloomy in 2017, but aren’t worried about a significant fall in homes prices.
The introduction of what’s believed to be the toughest housing curbs in histor y in October has dampened the city ’s red-hot proper ty market. It was followed by a series of government measures, including raising the ratio of down payments for those who have sec ured loans through the housing provident fund and intensifying the crackdown on illegal industry practices, all of which have added to the chill.
Last month, the transaction volume of new homes in Shenzhen declined to 2,922 units — down more than 30 percent from a month earlier — according to Centaline Real Estate Research.
Prices of new apartments had shrunken by 10 percent to 54,986 yuan ($8,000) per square meter last month since the restric tions were enforced.
Ma ny p o t e n t i a l b u y e r s have chosen to stay on the sidelines, waiting for what they see as an “appropriate” time when prices are deemed r e a s o n a b l e . Inv e s t o r s a n d speculators are also leaving the market as likely further depreciation of the renminbi has prompted them to seek greener investment pastures elsewhere.
The situation is most distinctive in Shenzhen’s central Futian and Nanshan districts, where the number of investors is the largest among all areas in the city. The two districts saw the biggest drop in property deals since the housing policy took effect — down 8.9 percent and 8.3 percent, respectively — last month.
“Due to the recent renminbi depreciation, many investors are shifting their focus to overseas real-estate projects, casting a negative effect on Shenzhen’s property market,” said Zheng Shulun, general manager of Shenzhen Centaline Property.
“It’s expected that enthusiasm for i nvestment i n Shenzhen properties will keep waning, and homes prices will continue to drop in the coming year. The exact situation has to be seen together w i t h t h e c o u n t r y ’s f u t u r e monetary policy and how the global picture develops.”
Song Ding, director of the To u r i s m a n d R e a l E s t a t e In d u s t r y R e s e a r c h C e n t e r at the China Development Institute, a Shenzhen-based think tank, said Shenzhen’s property market is expected to remain gloomy next year with the current restrictions in force, but the range of price drops “may not be that large as some people expect”.
“Right now, many people are adopting a wait-and-see attitude, and may act when prices come down to a certain level. This will lead to competition (among potential buyers),” he said in an article on his WeChat social platform.
“In this case, I believe that the price drop in Shenzhen proper ties may not be as
It’s expected that ... homes prices will continue to drop in the coming year. The exact situation has to be seen together with the country’s future monetary policy and how the global picture develops.”
director of the Tourism and Real Estate Industry Research Center at the China Development Institute
fall in the prices of Shenzhen’s new apartments in November since the curbs were imposed
large as some people think. The market will produce the final results.”
Prices of second-hand homes in Shenzhen had lost 8 percent last month to 54,670 yuan per square meter.
The transaction volume of new homes in Shenzhen declined more than 30 percent from a month earlier, according to Centaline Real Estate Research.