Sina.com reported that real estate in China has been hit hard by the coronavirus outbreak. Expectations that people would buy real estate when returning home for the Chinese New Year did not materialize. Statistics show a difference for the period from late January to early February when compared to the same period in previous years. The new home transaction volume of most real estate developers dropped 95 percent and the market has basically fallen to the freezing point.
As a result of the coronavirus outbreak as well as the Chinese New year, in 18 major metropolitan arias, transactions for existing houses fell 38 percent compared to the previous month.
The housing market also suffered from the suspension of construction and sales. On January 26, the China Real Estate Industry Association called for “real estate development enterprises to suspend sales activities temporarily at sales offices and to resume after the epidemic is over.”
Experts believe that this will undoubtedly increase the cash flow pressure on small and medium-sized real estate companies and that some may not receive any investments.
The suspension of construction will inevitably have a direct negative impact on investments inreal estate developments. Due to the quarantine measures, residents’ enthusiasm for house purchases has dropped significantly. Sales are expected to stagnate and short-term inventory will increase. Until the outbreak is fully under control, real estate developments and sales will continue to be hit hard and the recovery will be subject to how quickly the outbreak is controlled.
Source: Sina.com, February 5, 2020