Life of Guangzhou - Guangzhou Property Prices Drop Up to 30%

GUANGZHOU: An assessment of residential property prices in Guangzhou over the lunar new year holiday found that their value has dropped between 20 and 30 percent since October.

A group of potential real estate buyers look at a local developer's estate plan at a property exhibition. Guangzhou's property prices have plunged 20-30 percent since October. (AFP)

The week-long study was conducted by the Guangzhou Land Resources and Property Management Bureau, which found that most new residential buildings were not in bulk sale.

Long vacations are the best times for workers in the real estate business. It's when people often look for or buy homes.

And since the usual week-long vacation in May was abolished starting this year, the lunar new year was even more important for real estate companies to promote properties.

However, the study found that prices are down since Oct 1 - the National Day.

The market's reaction contradicts real estate developers' expectations. Some property market analysts predict the market won't rebound until the middle of this year, but others say the market simply won't be as hot this year as it was in 2007.

"The property prices in 2007 were the highest in history," said Li Wenjiang, an analyst of Guangzhou-based Hopefluent Group Holding's Limited.

He said the prices will decrease slightly instead of rebounding significantly this year. He expects the over-heated real estate market is expected to return to a normal this year.

The city's average residential-apartment price hit a record high of 11,574 yuan per sq m in October, an 81.3 percent increase from the previous year when it was 6,315 yuan per sq m, according to official statistics. That 2006 average was up 24.6 percent from 2005.

"With more residential apartments available and sales dwindling, speculative demand will be constrained, and more potential buyers will be waiting to see what happens," said Xie Xiaodan, director of Guangzhou Land Resources and Property Management Bureau. "Housing prices in Guangzhou will calm down." (By Liang Qiwen)

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