China Has Not Been Immune
→by the Mysterious Flying Miser
From the Huffington Post:
“The $180,000 apartment seemed a great investment and the perfect way to start off married life. Zhang Yong jumped at the chance.
“‘I saw it in the morning and bought it in the afternoon,’ Zhang says, sipping a cappuccino in a rooftop coffee shop at his downtown office building. ‘I thought the prices would go up even higher after the Olympics because prices were always going up, never down,’ he said. ‘I didn’t know this would happen.’
“Only a month after making a 25 percent down payment, Zhang’s dream home became a burden. Indeed, more Chinese are getting a taste of what American homeowners have been suffering for much of the past year.
“Still months away from completion, Zhang’s apartment-to-be lost a quarter of its value as Beijing’s housing bubble burst in dramatic fashion. As the walls and the wiring took shape, appliances and furniture were moved in, its value continued to decline. Eight months after he bought his home, apartments in the same complex are selling for 40 percent less per square meter than Zhang paid.”
From the 2009 China Urban Housing Conference:
“The collapse of the housing market in many countries is a stark reminder of the importance of housing for our families, our communities and our economy. We have learned that the loss of decent and affordable housing undermines family stability, disrupts the vitality of the urban fabric and loosens the underpinnings of a national economy.
“China has not been immune from the phenomena (sic) of falling home prices and empty units. The slowdown in new construction has dampened economic growth and has infected commercial real estate and chilled the global demand for many building materials contributing to a worldwide slowdown.
“We need to remember that the real estate (and the housing market) is inherently cyclical and that overheated markets and downturns are inevitable. We must also acknowledge that notwithstanding these cycles that housing matters, and where and how we live shapes the urban environment.
“This year’s Urban Housing Roundtable will try to place today’s housing market in a larger context. It will explore the connections between decent and affordable housing and family stability, neighborhood vitality and economic growth. It will also address the issue of how we should invest in affordable housing as the market starts to recover.”
From Caijing English:
“The average price of land in 35 major Chinese cities was 3,189 yuan per square meter in the first quarter, down 2.3 percent year-on-year or 1.5 percent quarter-on-quarter, China Business News reported, citing a Ministry of Land and Resources report released on April 23.
“The southern city of Shenzhen saw the sharpest decline in prices, with a fall of 26.8 percent, with other large cities in the south and central regions of China reporting price declines of more than 10 percent. Beijing bucked the trend, with prices rising 5.3 percent year-on-year, reflecting the relative scarcity of new development sites in the capital. The Ministry said in its report that land prices are expected to keep falling in the first half of this year, as the domestic economy has yet to bottom out.
“There has been significant downward pressure on land prices since mid-2008 as developers struggle to attract investment capital amid the global financial downturn. Southern cities that had attracted the lion’s share of speculative investment during China’s real estate boom led the decline, with other major cities following suit later in the year. Developers have also struggled with excess supply in the market, as seen in a 16.2 percent fall in first-quarter construction starts as developers sought to move existing units rather than embark on new projects.”
