Mar 5, 2013 - PropertyGuru.com.sg
Home prices in China could dip by up to 10 percent across major cities over the next three to six months, according to Raghav Bhandari, Asia-Pacific real estate analyst at CreditSights.
Spurred by the latest property curbs, home prices in tier one cities such as Beijing, Guangzhou and Shenzen climbed between 3.5 percent and 4.7 percent in January from the last year.
Agreeing is Nomura Property Analyst, Alvin Wong, who attributes the decline in prices to home upgraders holding off purchases to evade the high capital gains tax. Notably, Around 30 to 35 percent of China’s overall transactions came from buyers planning to upgrade their property.
As the housing market’s transaction volume will be affected, overall prices will not decline as backed up by abundant supply, said Du Jinsong, Head of Asia Property Research at Credit Suisse.
However, developers of high-end properties will likely be impacted by the property curbs, with Singapore-listed Yanlord as the most vulnerable, said Bhandari, while the demand for property will remain intact seeing the country’s mass urbanisation.
“Policies will always have a temporary, noisy, and negative impact on the sentiment. However, they will not have much lasting impact because Chinese urbanisation is still undergoing and its long-term demand will not suddenly disappear,” Liu Li-gang, ANZ Greater China chief economist said.
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