Life of Guangzhou - Property Prices May Keep Falling in Guangzhou

Despite the slightest increase in the average property price last month, many people in this southern metropolis still believe that prices will continue to drop this year, a recent survey says.

The average price of new apartments last month in Guangzhou reached 9,316 yuan per square meter, a mere 0.1 percent increase compared with February, according to statistics from the Guangzhou Land Resources and Property Management Bureau.

Many Guangzhou people believe the property prices will continue to fall. (Bloomberg News)

However, a survey conducted by the Guangdong Provincial Situation, Research and Study Center said more than 70 percent of local people believe prices will keep falling.

The survey interviewed about 1,600 people who have already bought apartments. And nearly 17.5 percent agreed that property prices will see a "big drop" this year.

"We conducted another survey last year in which people showed a totally different attitude toward property prices," said Feng Shengping, one of the researchers behind the survey.

Last year, the average price of new commercial apartments in Guangzhou was said by many to be beyond affordability, hitting a record high of 11,574 yuan per square meter last October.

"Driven by over-heated economic development, it was not a surprise to see the fast increase in property prices last year. But this year, the property development is expected to slow down," said He Jian, who lives in a large commercial residential community in downtown Haizhu district.

He bought an apartment two years ago for 7,000 yuan per square meter.

Li Wenjiang, a manager of Hopefluent Group Holdings Limited, said: "The property market here has hit a turning point. The price in the last two months was almost 20 percent less than in October".

Moreover, developers are now struggling to raise funds for new commercial apartments due to less turnover in the first three months, Li said.

According to official statistics, deals of only 8,988 new apartments, or some 958,400 sq m, have been reached in the first quarter in Guangzhou, down 45.8 percent over the same period last year.

"With locals becoming more rational about buying new commercial apartments, developers will have to reduce the prices to attract more buyers," Li said.

(By Qiu Quanlin)

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