Details on investment activity and transactions for the first half of 2008 throughout Asia have been released by CB Richard Ellis.

Demand has slowed from last year, but is still strong with core investors.

Highly leveraged investors have largely stepped out of the region’s investment markets due to the continued credit squeeze. Fnancially-sound investors remained generally positive on the outlook.

Overseas investors remained keen on acquiring investment properties in China, in spite of the increasing restrictions imposed on the entry of foreign capital.

Properties with offshore equity structures therefore have a significant advantage in the market as they enable investors to avoid time-consuming onshore approval procedures.

Larger developers are seeking to acquire smaller developers with attractively valued development land reserves.
Source: I-Newswire

Real estate sales are in a static mode or shrinking. The buyers are adopting a wait-and-see policty. As a result, a drop in prices, maybe quite steep, seems more and more likely.

The average price for new construction in May in Shenzhen was RMB10,254 per square meter, lower than the price in April.

Zhong Wei, director of the Financial Research Center of Beijing Normal University, said, ‘A spontaneous price adjustment such as the housing price drop in Shenzhen has been completely unexpected, not only by real estate developers but the government also.’

In Nanjing between January and May, 19,758 houses and apartments were sold, nearly 47% fewer than the year before.
In Zhejiang Province house construction increased by 8.3% over the same period last year; sales fell by 13.9%.
In Beijing in April and May this year, new housing reached 1.865 million square meters, while turnover was only 1.707 million square meters. In April alone, supply increased by 995,000 square meters with sales of only 747,000 square meters.
Shanghai’s May new construction sales volume reached only 44.5% of the total amount in May, 2007. The total turnover was only 1.4331 million square meters, and the supply/demand ratio was 1.24:1.

A recent report from the Economic Research Center of Renmin University. said, ‘Nationwide, in the first months of this year, 84.48 million square meters of building was completed, an increase of 20.2% over the same period last year, and the growth rate is 10.3% higher than in the same months last year. But the sales turnover was only 133.64 million square meters, a drop of 4% over the same period last year.’

Nie Meisheng, Chairman of the China Real Estate Chamber of Commerce, thinks China is now experiencing ‘real estate stagflation,’ characterized by rising prices and falling sales volumes.
Source: China Stakes

It is easy to get confused as the heading shows; almost impossible to see an overall pattern. In April non-residential property prices grew 6.5%, rate of growth down 0.4 percentage points.

So non-residential was going up, but not as much as it used to. This decline in the rise is patchy. And there are places where it is all decline.

According to a report released by Centaline (China) Shenzhen-Hong Kong Property Research Center, the average housing price in Shenzhen’s six districts dropped to RMB11,143 per square meter in May, down 23% from a year ago and 7% from April, on Tuesday. Those are substantial drops.

Can Shenzhen can look forward to boom times again?

Wang Shitai, brand manager of Sunstars Real Estate in Shenzhen said, ‘Despite the rise in transactions, I’m not optimistic about Shenzhen’s housing market in the near future.
‘Developers will have to slash prices further in order to boost sales to maintain their businesses. Many have offered prices as low as RMB5,500 per square meter in order to attract enough buyers.’

China Overseas Property, a major real estate developer in Shenzhen, launched a new housing estate, Xi’an Huafu, in Bao’an District on May 31, with opening prices of RMB5,500 per square meter, the lowest in the district this year.

The developer launched another project, Kangcheng Guoji, in early June, and set the opening price at RMB4,988 per square meter.

So, no, the boom days are not likely to return in the near future. And, yes, this is what the government was working towards.

Guo Shiping, an economics professor at Shenzhen University, said ‘When prices drop further and more investors fail to pay the mortgages, all of them will suffer.’ That is what happened with the sub-prime crisis in the United States. Only in China it will not be such a disaster.
Source: Window of China

The National Bureau of Statistics (NBS) reports China’s national real estate index was 104.07 in April, a decline of 0.65 point from March. But the index was up 1.42 points from a year earlier.

Still, it is slipping if not quite so quickly as to cast doom and despondency on all players.

The index for investment in property development was 104.28 in April, down 0.20 point from March but up 2.11 points from a year earlier. Slippage again.

About RMB695.2 billion ($99.3 billion) went into real estate development nationwide in the first four months of this year and that is up 32.1% year-on-year. Investment in housing construction increased by 35.2% to RMB494.4 billion, including RMB18.6 billion in low-income housing. That is up 24.7%.

The January-April period saw 80.65 million square meters of land developed nationwide by the real estate sector, up 5.9% on the same period of last year which is an increase but nothing like the massive increases we have seen in recent times past.

Between January and April, 1.79 billion square meters of real estate was being constructed nationwide, up 25.4% year-on-year.

So take a very short period and the tendency is either down or slightly up. The longer the period you use for examination the more bullish it appears. The shorter the period, the more bearish which is a word to indicate downwards. These are not panic figures. But they are not figures which will bring happiness and contenment to all real estate investors.
Source: China View

China´s rapid property growth is showing signs that it may be about to slow down, the Chinese Academy of Social Sciences (CASS) (seen in our illustration) has claimed.

According to Xinhua news agency, the pace of property price growth in 2008 is expected to slow but will stop short of going into reverse.

CASS has claimed, in its annual report on the real estate sector, that the reduction in growth will be felt across the country and that prices rises will eventually settle ‘far below’ that of last year.

The drop off in growth is believed to be in part due to a range of initiatives implemented by the Chinese government in an attempt to reduce speculation. The moves, the report said, are, according to the report, ‘gradually restoring rationality to real-estate demand.’

The NDRC earlier said property prices rose 10.7% year-on-year in March, compared with 10.9% growth in February.
Source: Asia Property Report