(Yicai Global) June 1-- Under high policy pressure, the second-hand apartment market in Beijing is entering a mini ice age.
The transaction volume in the resold apartment market in Beijing has declined since March, Securities Daily reported yesterday, citing a study by market research firm bacic5i5j.com.
The actual signing volume for resold apartments dropped by 34 percent in May, and the number of newly-registered clients fell 12 percent as against the same period in April.
In May, the average transaction price of resold apartment in Beijing dropped 2.4 percent as against the same period in April. Average transaction prices dropped in 8 out of 12 districts, and increased in only four. Tongzhou district and Yizhuang Development Zone logged the steepest drops at over 20 percent.
Investment and speculative phenomenon in the second-hand apartment market is restricted obviously facing the strictest, most exacting real estate market regulation, said Hu Jinghui, vice president of bacic5i5j.com. People demanding a better living environment with relatively limited funds must abandon or delay their apartment purchase plans, while even those with an irrepressible demand must assume higher loan costs than before. Thus, under a series of tight and strict policies, the qualified and competent real estate demands in resold apartment market of Beijing reduce obviously.
After this slew of regulation and controls, the former manic quality in Beijing's real estate market has now dissipated, Hu added. Owners no longer sell apartments by dropping price, and clients no longer rush to buy apartments. The market has returned to a rational order. The current situation of market is that apartment sources are increasing even as clients become fewer. Therefore, clients inclined to purchase apartments can choose carefully and the trade in the entire market is slowing down, showing the conspicuous achievements of new policies, which have thoroughly cooled the market.
The second-hand apartment trade in Beijing has at present ebbed to a very low level, and may drop further, but the space for decline is small and the decline will gradually lessen. Low levels and stability will form the future trend of second-hand apartment trade volume in Beijing, insiders said. Large price increase in early stages mean a space for price drawback still exists. A continual depression of trade volume will push home prices in future to further decline.