China house sales falling in 2008

Home sales by area and value both declined in the first half of the year, for the first time since 1998, with sales predicted to continue falling for the remainder of the year.

China saw its housing sales area and value decline for the first time since 1998 in the first half of this year, new statistics have shown. The drop was experienced across cities and the trend is predicted to continue.

Statistics released by the local land and housing authorities show that in Beijing, housing prices dropped in April by .8 percent month-on-month, and the housing sales volume fell by 38 percent year-on-year. Shanghai’s monthly housing price growth rate dropped by 5 percent year-on-year to 1.21 percent. And in Schenzen, average housing prices fell 36 percent from their peak in October at 17,350 yuan ($2,540) per square meter to 11,014 yuan per square meter.

Analysts are predicting that sales of residential houses in Shenzhen in particular will fall by the end of the year to the level of a decade ago, as investors remain cautious in the face of falling prices. The global economic slowdown and China’s current tight monetary policy have taken a toll on the real estate market in the short term. However analysts expect that in the long term the demand for property will keep rising.