Source : The Business Times, February 26, 2009
Prices need to fall further before buyers are attracted, says Goldman Sachs
(SHANGHAI) China's real estate developers do not expect the property market to recover until at least the second half of this year, as prices need to fall further before attracting more buyers, according to Goldman Sachs Group Inc.
'A sustainable property market is out of sight,' Goldman Sachs analysts Thomas Deng and Kinger Lau write in a report, which was based on observations from company visits in southern China and published yesterday.
Home prices in China fell 0.9 per cent in January, the second consecutive monthly decline and the longest losing streak since the government started issuing the data in August 2005. Property prices more than quadrupled in the five years through 2007 as urban incomes rose.
Goldman Sachs said that a recent increase in property transactions is not evidence of the market bottoming out. The analysts visited China Vanke Co, the nation's largest publicly traded developer, Shenzhen Investment Ltd and Gemdale Corp.
Sale volumes in the southern city of Shenzhen, bordering Hong Kong, more than doubled to 787,800 square metres in December from 358,300 sq m in November and 338,000 sq m in October, according to a report by property agency DTZ earlier this month. House prices in the city dropped 16 per cent in January from a year earlier. -- Bloomberg
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