Cracks appear in Beijing’s housing market, as up to 80 pc of sellers lower asking prices
Transactions have slumped since mid March amid a sudden U-turn in confidence as the credit squeeze weighs on homebuyers
Beijing’s secondary housing market has cooled for a third straight month, with growing evidence that buyers now have more leverage to negotiate than they did earlier this year, thanks to government efforts to tighten credit and curb pockets of overheating by pinpoint policy adjustment.
The market has cooled sharply since March 17, when Beijing’s municipal authorities tightened rules such that those who had paid off previous mortgages would no longer be classified as first-time buyers. In addition, new caps on mortgage lending meant second home buyers had to put up a minimum payment of 80 per cent. A majority of prospective buyers were priced out due to the higher purchasing threshold.
Housing agents say transactions have slowed dramatically as sellers are reluctant to compromise much on price while buyers are sitting on the sideline waiting for bigger bargains.
Monthly sales transaction are set to touch a 28-month low in June as just 4,082 homes changed hands in the first half of the month, compared to 10,250 for the whole May, which reflected a 27-month low, according to agent 5i5j.
Meanwhile, more than 80 per cent of Beijing owners are reducing their asking prices, while just three months ago, 80 per cent were raising prices, according to property agent Homelink.
