China's real estate sector showed signs of cooling at the beginning of 2014, with the transaction volume plummeting, figures from real estate research institute CRIC showed on Friday.
According to CRIC, most of China's cities, including both first- and second-tier cities, recorded falling transactions on both a yearly and monthly basis. Shenzhen, for instance, saw a drop of 72 percent in January from the same period last year. Guangzhou dropped 54 percent, Beijing by 49 percent and Shanghai by 31 percent year-on-year.
Besides seasonal and holiday factors, shrinking supply and tightened mortgages played important parts in transaction drops, according to the research.
"We expect the home price to grow further this year, but property developers will face much more sales pressure compared with 2013," said Hao Yan, an analyst with CRIC's Beijing branch
As I stated earlier there is no bubble. There is no way to mantain growth rates we've seen.
Think that is good news. It means government can control the market enough to avoid crash.
That could make P/E values of real estate companies to rise.
Compared to Washington D.C. in 2005 to 2007, China's unelected officials are handling the property price increase with more skill. They have at least some attempts, with some success, in lowering price appreciation without killing the industry. In USA, the bubble got so big it had to burst, and it did.