Real estate agencies close stores as market cools
Updated: 2011-11-09 13:19
BEIJING - Real estate agencies in Beijing have shut down nearly 1,000 outlets so far this year, with 177 in October alone, as the property market cooled following a slew of government tightening measures, according to a survey by a leading real estate agency.
The survey, released by Home Link China on Monday, said the city has seen more than 100 stores close for several consecutive months, 73 percent of which were owned by small- and medium-sized agencies.
The agencies are facing increasing pressure as trading volume continues to decline, said Zhang Yue, chief analyst with Home Link China.
She attributed the slump to the government's tightening measures, which include higher mortgage rates, a ban on third-home mortgage loans and purchase restrictions.
The Chinese government started to restrict residents in 43 major cities from buying second or third homes earlier this year, resulting in property transaction volume declines in many of these cities.
In Beijing, only 12,760 homes were sold in October, down by 40 percent from a year ago, while second-hand home sales in the first ten months totaled 101,188 units, down 35.8 percent year-on-year, according to bjfdc.gov.cn, a website operated by the Beijing Municipal Commission of Housing and Urban-rural Development.
Zhang said real estate agencies expanded blindly in 2009 as they rushed to cash in on the quickly rebounding housing market, but many are now finding it hard to survive the current market with virtually no business.
According to Home Link's research, the top seven real estate agencies hold more than half of the share of the second-hand house market, while small and medium-sized ones have 25 percent.
That is why small agencies are facing greater challenges in surviving, said Zhang.
Pressed by both a financial crunch and a sales slump, more real estate shops will close, and the trading volume is unlikely to rebound in the short run, she said.