In our final Asia Pacific Watch for the year, we focus on the world's largest market by population – China – and its largest property type: residential. Adequately housing its 1.4 billion citizens, (760 million of whom live in cities) has challenged policy makers for decades and since the late 1990's has been a challenge to which private sector developers have risen. With overbuilding in the luxury segment, speculative activity among some buyers and impacts upon affordability, Beijing imposed its housing purchase restriction (HPR) policies to suppress the market back in late 2010 and early 2011. As GDP growth slowed earlier this year, the authorities decided it was time to lift or relax HPR policies and loosen the mortgage market to improve access for first time buyers.
The result has been some strong sales volumes since September and pricing (a lagging indicator) should start to rise by the end of this year or early next year (depending on the city). Average home prices are down 9.5% (October 14 over October 13) and when the year is done, the volume of floorspace sold may be down 5 - 10% from 2013, although this level would still be the second highest on record.
Source : CBRE Global Investors