Even the Olympic rings are losing their luster for Beijing’s property investors.
Apartment prices in the 2008 Olympic village, home for athletes at the Summer Games in August, fell 3.1 percent this month to 31,000 yuan ($4,535) a square meter after doubling from January to September 2008, according to SYS.WIN Brokerage and Soufun.com, China’s largest property Web site. The complex that housed the likes of swimmer Michael Phelps and runner Usain Bolt is 10 miles (16 kilometers) north of the city center.
“It’s nice to be next to the Olympic park and part of history too, but it offers nothing else,” said Li Feng, who owns four apartments in the capital. “It’s too expensive to be investing in these apartments which aren’t centrally located.”
Beijing property prices dropped in January for the first time since records began in 2005 after China’s economic growth slowed to 6.8 percent in the fourth quarter, the lowest in seven years, because of the global recession. Property had risen 8.2 percent annually in the previous four years, according to official statistics.
“Buyers are taking a wait-and-see attitude and not snapping up properties in Beijing as they would previously,” said Francis Zheng, general manager at Beijing Jia Hua Four Seasons International Exhibition Co., a property show organizer.
‘Big-Ticket Spending’
More than 1,400 Olympic Village apartments -- accounting for 55 percent of the 520,000 square meters available -- were sold before mid-September, data from the Beijing Municipal Construction Committee shows. The Beijing unit of SYS.WIN, which markets the properties, didn’t respond to requests for more recent sales numbers and staff declined to be interviewed.
Olympic properties may be faring better than the city overall -- and surrounding areas in particular.
New residential projects launched in the Olympic area in the city’s north, within walking distance of the Bird’s Nest stadium and Water Cube swimming pool, are for sale at 14,800 yuan a square meter compared with 25,000 yuan before the Games, according to Soufun.com and the city’s construction commission.
House-hunters and speculators have turned cautious because of the global economic and financial crisis, said Pan Shiyi, chairman of SOHO China Ltd., central Beijing’s biggest property developer.
“Many families are watching their expenditure, especially for big-ticket spending like buying a property,” Pan said in a written response to questions. Beijing apartment prices will face increasing “downward pressures” this year, he said.
‘Special Priority’
Beijing’s economy grew 9 percent last year compared with 12.3 percent in 2007, according to government figures. Keeping growth steady holds “special priority” this year, Mayor Guo Jinlong said Jan. 20.
The city government is pushing to “inject life” into the Olympic area by adding residential blocks and malls near stadiums, Long Cheng, chief supervisor of SYS.WIN’s research institute, said in a report.
“This creates opportunities for residents to continue to use the stadiums and other supporting facilities,” Long wrote. “It also helps ensure the venues can continue to generate economic value.”
Residents who bought apartments at the Olympic Village will be able to move in when renovations are complete in October.
Beijing Games organizers have raised 26.5 million yuan at seven auctions of vehicles, computers, televisions and other electrical devices used at the Olympics, said the China Beijing Equity Exchange, which handles the sales. Properties may become a tougher sell in 2009.
“In such uncertain times, I will hold back from buying more apartments,” said Li, who has only rented out one of four units she bought in 2007 and lives in two of them. “I’m just keeping my cash now.”
(Source: Bloomberg)
