China is experiencing a serious downturn in the real estate market. Housing prices in major cities have fallen by 20-40%, while the volume of housing sales has decreased by 18%. This is reported by Rossiyskaya Gazeta
The reason was excessive construction in recent years, which resulted in a huge surplus of housing, the publication notes.
Experts believe that a similar crisis is unlikely to repeat itself in Russia, since the utilitarian function of housing is preserved here, and not an investment one, as in China. Russians really need new square meters, while in China more than 90% of the population are already homeowners.
“The housing already built is estimated to be enough to accommodate 3.7 billion people, while the entire population of China is now 1.4 billion,” notes Zhigang Chen, vice president of the China Business Center Association for the Promotion of Business Relations.
Many developers have gone bankrupt, banks are not extending their credit lines, and construction is being suspended. Unfinished buildings are often torn down in whole blocks. The Chinese government is trying to stabilize the situation by directing construction to rural areas, limiting new construction in major cities, and buying apartments from developers to provide to low-income families.
“These events have not only exacerbated the financial problems of developers, but also generated mistrust among buyers. Expectations of a further fall in prices and concerns about the completion of construction are holding many back from buying housing,” says Karina Avakova, founder and director of the China MICE agency ( Shanghai ).
Prior to this, the State Duma proposed introducing a new mechanism for housing loans.
Earlier, the economist told what beginning investors should invest in.