Prices could be cut in half in the upcoming year

For ten years the real estate market was the driving force of China’s economical success. But according to the annual report Real Estate 2009, written by the Chinese Academy of Social Sciences (Cass), the sales for 2008 broke down with 19.7 per cent.

Last year the vacancy of homes in China went up till 164 million m2, which is 21 per cent more then in 2007. The report predicts an increase of sales for later this year. This is due to the deduction that developers have to give to receive cash.
Researcher Cao Jianhai of Cass predicts a decline for the housing prices of 50 per cent for the upcoming year.
Local government purchased 40 per cent less land for housing in the first quarter of this year.

The government reduced the interest rate, banks are allowed to give more credit and the down payment is reduced for home buyers.