Cracks in Shenzhen home prices emerge in reaction to mysterious shaking of SEG skyscraper
- Some apartment listings within 15 minutes’ walk of SEG Plaza are quoting about 7 per cent lower than their previous asking levels
- A drop in prices of homes, shops, offices and land bank is inevitable, an E-House official says
A two-bedroom commercial apartment within 10 minutes’ walk from the skyscraper was priced at 4.18 million yuan (US$655,850) or 67,400 yuan per square metre on May 24, according to a listing on major property portal Anjuke. That is about 7 per cent below a similar-sized unit in the same estate on May 11.
In another residential estate located about 15 minutes away from the tower, an apartment was listed at 2.1 million yuan on May 27, or 6.7 per cent lower than its initial quote in March, according to data on the portal.
“The wobble is quite scary and casts questions over the quality of the property,” said Yan Yuejin of the E-house China Research and Development Institute. “The uncertainties would definitely have a negative impact on the property and those in its vicinity. A drop in prices of homes, shops, even land bank is inevitable.”
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“If I have a choice, I will not buy homes nearby” the wobbling tower, said Tiffany Shi, who has not found a place that fits her budget after a year’s search. “But if prices become really very attractive, I would not mind giving it a shot. I think the government will take care of any problem with the tower.”
Shenzhen ranked among the top five most expensive cities to live in globally for a second consecutive year, with an average price of US$783,855 (HK$6.1 million) or US$783 per square foot, according to a recent report published by CBRE.
Meanwhile, the SEG Plaza has been sealed off. In a May 20 notice to tenants shared by the official news agency Xinhua, the building owner SEG Group said no one would be allowed to enter until an investigation was finished, without giving a time frame.
The group has banned “all owners, merchants and tenants from entering or leaving the [building] and electronics market … [which] will open again after the relevant inspection work is completed,” according to the notice.
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A preliminary investigation indicated that a combination of three factors, including wind, the subway line below the SEG Plaza, and temperature differences inside and outside the building, likely all played a part in what some experts have said was the creation of an aerodynamic phenomenon known as the “Karman vortex street,” according to a report from the state-backed China Securities Journal.
The Shenzhen Housing and Construction Bureau has commissioned multiple professional institutions to monitor the building since the incident. Tests so far have found everything to be within official ranges set by China’s safety bodies, the Shenzhen local government said in a statement on its WeChat account.
For now, the price cuts haven’t gathered much momentum yet, said Fion He, director of Midland Realty’s research unit.
“It may impact the home seekers’ choice more or less, but we have not seen a trend that homeowners in the area are rushing to offload their properties and offer sharp discounts,” she said. “It is a seller’s market in Shenzhen. A home at a reasonable price can always find a buyer.”
