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Guangzhou property investments slide
By Qiu Quanlin (China Daily)
Updated: 2008-05-13 09:38

GUANGZHOU: People who bought apartments here over the past few years have seen the value of their investments slump, and they believe there is worse to come, a survey has found.

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Housing in China 

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Of the 1,600 recent homebuyers polled by the Guangdong provincial research and study center, 70 percent said they think apartment prices will fall this year, with more than 17 percent anticipating a "big" drop.

In March, the average price of a new apartment in Guangzhou was 9,316 yuan ($1,330) per square meter, up 0.1 percent on February.

All the respondents bought their homes between 2004 and last year. The average price last year was 11,574 yuan per square meter.

A member of the research team said the property market is forecast to drop this year due to a number of factors, and this could force developers to reduce their prices.

The survey showed most people were cautious about buying a second property.

Guangzhou property investments slide

He Jian, who owns a property in a residential development in the Haizhu district of Guangzhou, said: "Driven by a booming economy, it was no surprise to see a big increase in property prices last year."

He bought his apartment in September for 14,000 yuan per square meter, but said he has since seen a downturn in the market.

Li Wenjiang, a manager with Hopefluent Group Holdings, said: "We are now at turning point. The price last month for an apartment was down almost 20 percent on last year.

"Developers are facing a tough time raising capital due to falling demand from buyers."

In the first quarter of this year, 8,988 apartments with a total area of 958,400 sq m were sold in Guangzhou, down more than 45 percent on the same period last year, the research center said.


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