China’s property market entered its traditional peak sales season in October, also known as the “Golden Nine and Silver Ten.” During this time, household consumption in the country tends to increase significantly. 

But the latest research data shows that China’s real estate sector continues its slump.

According to Apollo News, data from E-House Real Estate Research Institute shows that only 4 out of the 50 cities monitored in China, including Chengdu , Beijing , Shanghai , and Hefei , are picking up.

The remaining 46 cities continue to see falling home prices, with 38 already having cut prices for a year.

Zhengzhou , the capital city of Henan province, slumped to a 46-month low at 9.6%.

Meanwhile, other cities around Beijing and Langfang of Hebei province hit their lowest level in 43 months at 15%, indicating the greatest drop among the 50 cities.

Financial Associated Press reported that Shenzhen, “the Silicon Valley of China,” witnessed apartment prices plummet from county to city. Some places are giving discounts of up to 40%.

The outlet noted that the unit’s price in the Jingji Shuibei, Times Square project hit a record high at around $930 a square foot (72,000 yuan/square meter). But since the adjustment in September, the price has sunk to only $600 a square foot (46,000 yuan/square meter), down 40% from the record price. 

Moreover, the middle floor’s price has dropped to about $650/square foot (50,000 yuan/square meter), the equivalent of 30% fall from the highest price. 

A real estate consultant at the company explained the main reason for the discounts was due to developers losing patience and wanting to make quick returns amid a gloomy property market.

Zheng Shulun, general manager of Shenzhen Centaline, said that property listings in the city have significantly increased but asking prices keep declining. Thus, developers have no choice but to lower prices as they need to withdraw funds quickly from the business.

Regarding office leasing, Caixin, citing data from Savills, reported that demand for Beijing’s office leases is low, with Grade A office net take-up in the third quarter reaching only 90,700 square feet (8,425 square meters).

Over the first three quarters, the cumulative net absorption of Grade A offices was around 1 million square feet (93,100 square meters), an 84.8% drop from a year earlier.   

Additionally, Beijing’s net office absorption hit a new record low for the second consecutive quarter. In the June quarter, Grade A office market recorded negative net absorption of about 116,000 square feet (10,750 square meters).

Meanwhile, the new net leasable area in the last quarter reached below 108,000 square feet (10,000 square meters), showing the lowest office absorption level.

A weak office market would result in a high vacancy rate. Therefore, Cushman & Wakefield’s data shows that Beijing’s office vacancy rate in the last quarter climbed 14.6%, up 0.8% from the previous month.

Among Beijing’s five major business districts, the office vacancy rate in the Zhongguancun , home to many internet companies, jumped to the highest point at 11.1%, a 4.9% surge month-on-month. 

Zhongguancun , a major technology hub in Haidian District, was once a strong office market with low vacancy rate. Average rent was second only to Financial Street.

However, some online education and internet firms have withdrawn from leases in the past quarters. This led to a constantly rising vacancy rate.

As reported by Apollo News, survey data for the third quarter from China’s central bank shows that only 14.8% of the respondents expect real estate prices to surge. This indicates the lowest level since 2009.

56.6% thought prices are basically unchanged. Meanwhile, 16.3% of those surveyed expected a drop in home prices, and 12.4% had no idea.

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