Shenzhen property purchase may drop 10% in second half
Updated: 2007-08-02 15:25
Property consultancy firm Land Power predicted that the number of Hong Kong residents purchasing properties in Shenzhen would drop 10 percent in the second half because of the enforcement of cooling-down measures.
However, Land Power Chairman Michael Choi said that the city's economic fundamentals would remain robust to sustain the skyrocketing price, of which the market still has room for 3 to 5 percent raise by the end of the year.
Shenzhen government earlier released measures to restrain Hong Kong residents from buying more than one flats in the city.
"The central government has launched the nationwide policy for a while though Shenzhen began to enforce the mandate in recent weeks," said Choi.
"The policy is expected to temporarily deter Hong Kong buyers from getting into the market. It would prompta 10 percent drop in house purchase," he said.
However, Choi believed the downturn would be reversed soon due to the booming cross-border economic activities between Hong Kong and Shenzhen.
"We see more and more Hong Kong residents moving to Shenzhen for work, which will drive a strong housing demand," he said.
In the first six months of the year, Shenzhen property price rose 33 percent, the largest among big mainland cities.
However, Choi said the raise has yet reached the ceiling. "In view of the increasing average income and strong appetite for housing, the prices could shoot further up by 3 to 5 percent," he added.
Also, the enforcement of the measures will make possible Hong Kong buyers move from Shenzhen to other mainland cities like Guangzhou and Shanghai.
Land Power's report indicated that hot spots such as Guangzhou, Shanghai and Pearl Delta River region would see increases in property prices in the second half, respectively at 5 to 7 percent, 4 percent to 5 percent and 5 percent to 6 percent.
"In Guangzhou, the price growth has long lagged behind Shenzhen and Shanghai. We see the accumulated purchasing power will unleash that drives the price up substantially," he said.
Choi predicted Hong Kong residents would spend 17.9 billion yuan to buy mainland properties for the whole year, rising 22 percent over the previous year, while transaction volume would grow 8 percent to a level between 24,300 and 25,500 units.