Economy

Property prices to tumble in 3rd quarter

By Yan Weijue (chinadaily.com.cn)
Updated: 2010-06-28 13:42

The price of housing is expected to fall in the third quarter as measures taken to regulate the property market take hold.

Experts believe the decline in property sales will put pressure on developers to reduce prices beginning in July, especially in China's main cities.

The volatile market forced most buyers to cancel or postpone their purchases with the trading volume halved in May, according to statistics from China Index Academy.

The market witnessed an average decline of 44 percent with Beijing, Shanghai, Shenzhen, Nanjing and Hangzhou dropping to an historical low. In 30 cities across China many developers witnessed no sales in May, which economists have attributed to prudent buyers.

Under pressure, some leading property giants have seen a slight improvement in sales after lowering prices, which insiders speculate will become a trend across the nation.

One analyst with Midland Realty believes the decline is part of a stepwise process which will see prices tumble in the third quarter.