Real Estate Prices Have Fluctuated In China’s Metropolitan East, But Signs Of Recovery Are Starting To Surface
Although news coming out of emerging markets seems to be more rosy than that of their more developed counterparts, China itself has not been unaffected by the global economic downturn. Prices of hard assets like real estate have been hit particularly hard in some cities, like Beijing and Shanghai, where strong demand over the last several years has created something of a “bubble,” yet not as severe as those found in California or Florida. However, as China’s economy begins to head north again, several real estate experts have written on the resiliance of the real estate markets in China’s most important economic centers. In Shanghai alone, Shanghai Uwin has put out a study indicating that more than 1 million sqm of new homes, excluding those designated for relocated residents due to urban redevelopment projects, were sold across the city during the first 15 days of this month, up 12 per cent from the same period in May. This indicates that the city’s real estate market is, gradually, gaining steam again.
The important thing to keep in mind when trying to conceptualize the Chinese market is that many of the buyers in cities like Shanghai, Shenzhen, Guangzhou, or Beijing are first-timers, and tend to be on the cautious, young side. Since China’s economic power centers are concentrated on the east coast, in only a handful of huge metropolises, real estate is virtually always going to be in relatively short supply and relatively high demand. The population size — and economic and employment realities — guarantees this. So even in a comparatively sluggish market, when many younger people are finding it harder to settle down, real estate in Shanghai and Beijing is still going to perform pretty well.