Large price falls witnessed in China

Country:  China

13 November 2008

Properties located in Chinese cities that are dependent on exports are falling drastically in value due to the global financial downturn, according to experts.

Homes in Guangzhou and Shenzhen, both of which are situated close to Hong Kong, have recorded the greatest price falls over the past year, depreciating by 5.2% and 10.8% respectively.

Samson Chan of Stanley & Partners Investment Management Company, a property consulting company, says: “Real estate prices in export-driven areas show there is no decoupling between the global crunch and the local economy.

“Many manufacturers and developers, who geared up a few years ago, are struggling to find customers and financing.”

Chan says that the property market in the Pearl River Delta in southern China has been worst affected by the financial slump.

Annual property price growth, which stood at 3.5% in September, is currently appreciating at its slowest pace in at least three years. 

Credit Suisse Group project that property prices will fall by 15% in Guangzhou, Shenzhen, Chengdu and Beijing and 10% in other major cities, next year.