By Nikki De Guzman:
Housing prices in China could drop by up to 10 percent across major cities over the next three to six months, according to Raghav Bhandari, Asia-Pacific analyst at research firm CreditSights.
This after home prices in tier one cities like Beijing, Guangzhou and Shenzhen climbed between 3.5 and 4.7 percent in January from last year.
In agreement, Alvin Wong, property analyst at Nomura, said the potential decline in prices could be attributed to property upgraders holding off purchases to avoid the high capital gains tax. Notably, around 30 to 35 percent of China’s overall transactions come from buyers looking to upgrade.
Despite the fact that transaction volumes will be affected, overall prices will not fall due to abundant supply, said Du Jinsong, Head of Asia Property Research at Credit Suisse.
However, developers of high-end properties will likely be impacted by property curbs with Singapore-listed Yanlord being the most vulnerable, said Bhandari. Meanwhile, demand for property will stay firm due to the 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,” said Liu Li-gang, chief economist for ANZ Greater China.
Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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