Golden Week, a seven-day Chinese holiday, is traditionally a peak period for home sales. This year, sales plummeted.
The South China Post reports ‘Golden Week’ Property Sales Plunge in Major Chinese Cities.
Property sales in China’s major cities saw one of their worst “golden week” holidays in years, as buyers held back amid a slowing economy and tight restrictions on mortgage loans.
Sales of new homes in Beijing dropped to their lowest level since 2014 during the week following the National Day holiday, according to data from the property information portal Zhuge.com.
By area, sales of new homes in Shanghai plummeted 86 per cent to 5,000 square metres, while the capital saw a 92 per cent plunge to 2,000 sq metre, according to data from Centaline Property.
Clement Luk, a director for east China at Centaline Property, said the home-buying mood has been dampened by the tightening of mortgage lending and the prolonged US-China trade war that discouraged spending.
“People do not want to commit in big investment now, like purchasing any homes, as market sentiment has cooled quickly since March,” he said. “Most owners prefer travelling during golden week holiday instead.”
“Deals are increasingly difficult to conclude unless owners are willing to cut selling prices at big discounts,” said Guo Yi, chief analyst at Beijing-based property consultancy Heshuo Institute.
Beijing Dilemma
Beijing faces the dilemma of all speculative markets: because most real estate buying is now driven by expected price increases, when prices credibly stop rising, buyers disappear and prices begin to fall. Price stability isn't a real option.https://www.scmp.com/business/article/3032030/golden-week-property-sales-plunge-major-chinese-cities-amid-slowing … via @scmpnews
Michael Pettis @michaelxpettis
When property speculation ends, property bloodbaths begin.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
Recommended Content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.