China's real estate both rose and fall in the month of October, as smaller cities sustained the drive behind real estate, but developers refused to be lulled into a false sense of hope by that drive. As a result, they held back expansion as well as sales and preferred to wait out how economic conditions will end up. In Straits Times' report, prices for new homes across China's 70 major cities experienced a growth of 1.0 percent in October, a number higher than September's 0.9 percent calculation. The solid growth is seen as a cushion of sorts; the government has been cracking down on spending following debt concerns and the US' aggressive tactics, using the trade tariff to force China into a corner.
The fear of the market analysts is that this could drive property owners and landlords to flood the market with goods, which could produce a price bubble. It's also the 42nd month where price increases have been the norm and higher prices are expected from the yearly real estate boom that has moved on from the metros and into the surrounding areas.
This has forced developers to back down from selling more properties and into a defensive stance. According to Business Times SG, property investments have trimmed down to 7.7 percent in October from a high of 8.9 in September. While prices have gone up, property developers have decided that now is not the best time to cash in on their investments.
In the third quarter of the year, this has also shown a slow-down in the second-biggest economy in the world. It's also the weakest since the US has countered globalization with trade tariffs and an increasingly insular stance. Market analysts see no end to the trend yet and warn that investments could go down a bit further.
However, the property slow-down may not be as widespread as anyone thought. The property market has largely borne the brunt of the slow-down mainly because some enterprising investors have turned to cities where properties have fewer restrictions. They have also relied on relaxed local governments, who can't tighten rules on real estate-one of their primary sources of income.
As markets embraced the slow-down, buyers have largely chosen to remain on the sidelines, waiting for the situation to plateau. Construction remains a rare bright spot, however, as it rose 14.7 percent in the month.
