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Concerns in Chinese Real Estate Sector Grow as Transaction Volumes Plummet

February 2nd, 2010 Michael McDonough

Concerns over the future impact Chinese policies could have on the real estate sector have nearly halted transactions in the sector as buyers expect prices will begin to fall. According to the China Securities Journal, the volume of second-hand property transactions fell nearly 70% m/m in January, with new sale transactions falling by more than 45%. This news likely will not bode well for the Chinese real estate sector, especially companies like EHouse (EJ) who rely on volumes.

Further aggravating China’s real estate sector were comments by Beijing’s vice-mayor picked up by China Daily who said “I want to make it clear – Beijing is determined to curb the price hike.” He added, “I believe Beijing’s property price will not experience wide fluctuation this year.”

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