GZ Housing Prices May Continue to Fall During Olympics

The Olympics carries on like a raging fire, but the real estate market in Guangzhou seems to have entered a major cool-down. Many pundits believe that housing prices will continue to fall during the Olympics.

These days real estate agencies face great difficulty making sales while, according to the Hopefluent Group, there will soon be some 40, 000 additional flats and houses entering the market, which will doubtlessly ratchet up competition even more.

The past six months have proven hard on agencies, and now they are striving to meet their annual sales targets, according to Li Wenjiang, chief analyst at Hopefluent.

Li also estimates that housing prices will continue to decline, but only on a small scale.

On one hand, despite the falling prices, many consumers are still waiting rather than buying.

Prof. Wei Qingquan of Sun Yat-sen University explained that now the market is no longer dominated by speculators, but by those looking for homes. And since there is no wage increase in sight, with food prices spiking, they are neither able nor willing to invest in real estate.

Moreover, as the governmental home project proceeds, there is more cheap accommodation becoming available, which drags down the average housing price as well, he said.

The 2010 Asian Games, expected to increase the value of real estate, might not influence local property prices until 2009.

However, statistics also show that the price of upscale apartments and villas is still rising.

(By Yang Quanquan and Stephen Roach)

Source: Lifeofguangzhou.com

Editor: Chen Minjie