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Hong Kong Is Finished: No Longer a Financial Hub | How a City Goes from Global Fame to Global Shame?
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The May Day Golden Week used to be one of the peak seasons for real estate sales in China. However, this year's May Day holiday saw extremely quiet sales in property sales offices and second-hand housing transaction venues, with very few transactions taking place. Even first-tier cities like Beijing and Shanghai were no exception. For example, Beijing's newly signed contracts for commercial residential properties were only 114 units, with a transaction area of only 14,000 square meters. This represents a decrease of over 60% compared to the same period last year, when Beijing was almost under lockdown due to the pandemic.
The market conditions are poor, and developers in urgent need of capital have to find ways to promote sales, with price reduction being the most effective method. However, under the rule of the Chinese Communist Party, it is not solely up to the real estate companies to decide on price reductions. Recently, a major news story emerged in the Chinese real estate industry. Two property projects in Kunshan City, Jiangsu Province, significantly reduced prices by 30% during the May Day period. As a result, the developers were fined heavily by the local housing and construction bureau and their online signing business was suspended. The real estate companies were required to rectify their actions, which also meant they were not allowed to engage in selling activities for awhile. The explanation given by the housing and construction bureau was that unauthorized price reductions disrupt the market and make it difficult to sell neighboring properties. Such unauthorized price reductions are considered dishonest and lack integrity, and have been officially documented as a misconduct in the annual integrity file!
#shanghai #beijing #chineserealestate #chinaeconomy #chinaobserver
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