In 2015, China’s housing market will continue to cool, resulting in the emergence of ghost cities.
Although Chinese investors continue to pour billions of dollars into real estate assets in the United States that appreciate in value month after month, things are a little different back home in China. used cars in qatar under 10 000
Despite the Chinese government’s efforts to promote home purchases, new home prices in China fell for the fifth month in a row in January 2015, as poor demand weighed on consumer sentiment.
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According to data from China’s National Bureau of Statistics (NBS), new home prices dropped by an average of 5.1 percent in 69 of 70 cities from the previous year.
This drop in China housing prices surpasses the 4.3 percent drop in December 2014, which was the highest since the data series started in 2011.
In January 2015, both Beijing and Shanghai saw price declines of 3.2 percent and 4.2 percent, respectively, compared to 2.7 percent and 3.7 percent declines in December 2014.
Last month, the People’s Bank of China lowered major banks’ reserve requirements, or the minimum amount of cash banks must keep in reserve before lending. The step comes after the central bank surprised the market with a rate cut in November.
Following years of rapid growth, China’s property prices have been cooling as a result of a supply glut and slower economic growth.
China’s housing sector accounts for roughly 15% of the country’s GDP. In 2014, the world’s second-largest economy slowed to 7.4%, the lowest rate in 24 years.
According to local real estate analysts, China housing prices have been steadily declining across the board.
China’s current issue is high developer inventories. Chinese developers also have two to five years’ worth of inventory to sell. Home prices in China will not rise any time soon before that has been absorbed, and China’s popular ‘Ghost Cities’ will continue to exist.
