Shenzhen housing market gets chilling effect as policy curbs flush out speculative buyers
- Homeowners are starting to cut prices as policy curbs suddenly reduce the pool of buyers in China’s hottest property market
- Midland Realty predicts slower sales and price increase in the second half because of the cooling measures
Nowhere is that more evident than the sudden squeeze this month in Shenzhen, the Silicon Valley of China and a speculative hotbed in the southern province of Guangdong that borders Hong Kong.
Some homeowners have started slashing their asking price by about 5 to 7 per cent after local authorities introduced harsh measures to clamp down on runaway prices, according to property listings. Some 1,019 units out of 30,000 existing homes listed on Centaline Property’s website are now offering discounts to entice buyers.
They include a two-bedroom unit measuring 60 square metre in Fudian district selling at 4.1 million yuan (US$585,000) after a 4.7 per cent discount, and 371-sq m villa in Nanshan district that is going for 65 million yuan after a 7 per cent knockdown.
The discounting follows a decision by the local government on July 15 to impose extra residency and tax requirements on buyers to flush out speculative elements that gave Shenzhen the unwanted distinction of being the most expensive housing market in mainland China.