In recent times, several commercial apartment projects in Shenzhen have been offering discounts, some as low as 50% off. Industry experts have indicated that the real estate market remains sluggish, with a significant decrease in investment demand, forcing developers to lower prices to attract buyers.
According to a report from “Times Weekly” on September 15th, multiple commercial apartment projects in Shenzhen have been offering discounts, with some unit prices as low as around 20,000 RMB per square meter, making it possible to purchase a small unit for less than 1 million RMB.
It is reported that the average discounted price of the Kaisa Yuefu commercial apartment in Shenzhen is approximately 45,000 RMB per square meter, while the average recorded price of residential products in Kaisa Yuefu is around 88,900 RMB per square meter. The price of a commercial apartment in Kaisa Yuefu is nearly 50% lower than the previously offered price of nearly 90,000 RMB per square meter for a similar property in the same area three years ago.
Zhao Min, a sales manager at Zhongyuan Real Estate, disclosed, “Currently, there is no product with such a small area, low unit price, and low total price in Futian area. The owner made a direct concession on the price, and small units are very suitable for investment customers with relatively low investment, hence the active transactions.”
The trend of price reductions in commercial apartments is not limited to Shenzhen, as discounts have spread throughout the city. From Baoan, Futian, Longhua, and Luohu to Longgang, there are apartment projects offering discounts for sale.
For example, a large flat unit in a commercial office project currently for sale in Baoan has a minimum discounted price of 42,000 RMB per square meter, with a recorded average price of over 80,000 RMB per square meter. A completed apartment project in Longhua offers units at a minimum price of around 30,000 RMB per square meter, with the original recorded average price exceeding 60,000 RMB per square meter.
Commenting on this, Zhao Min remarked, “It’s not that we want to drop prices so low, but in the current market, only with exceptionally low prices can properties be sold. Do developers want to receive payments? If so, they have to make concessions. This is the current reality of the market.”
Despite developers selling at reduced prices, due to investors “disappearing,” the market has not yet recovered from the downward trend. While there has been some activity in selling commercial apartments at half or even one-third the price of residential properties, the overall market still remains sluggish.
Statistics from Ke Rui for Shenzhen show that in August this year, the transaction volume of commercial apartments in Shenzhen experienced both price increases and decreases. The transaction area was about 28,200 square meters, a 4.61% increase compared to the previous month but a 2.2% decrease compared to the same period last year. The average transaction price was around 46,000 RMB per square meter, a 24.47% decrease month-on-month and a 33.69% decrease year-on-year.
The Shenzhen Zhongyuan Research Center believes that from a supply perspective, the commercial supply in August saw a significant decline, with two consecutive months of no new office supply, and the commercial office supply continues to remain low. Coupled with the broader economic impact, the commercial office market is expected to continue to experience a downturn.
Li Yujia, the chief researcher at the Guangdong Housing Policy Research Center, opines that the price decline of commercial apartments and similar residential projects that have already been developed is much more significant than that of residential properties, leading to a considerable impact on the real estate pricing system and posing greater difficulties in liquidation.
Even though developers are offering discounts of up to 50%, some netizens believe that buying an apartment may not be a wise decision.
One netizen, “Hunter,” expressed, “The utility, electricity, and management fees for apartments are several times higher than those for residential properties. Moreover, one cannot register as a resident. I’ve always wondered, with similar prices, why would one choose an apartment over a residential property?”
“Xi Tang” similarly stated, “One must also consider the high taxes involved in selling. In reality, there isn’t much investment value.”
Other netizens pointed out that the current economic situation is not conducive to buying properties, and holding onto cash is a safer option.
“Shan Ding Qing Song” remarked, “People now see the economic development trend clearly, holding onto their money bags. Without buying houses, they won’t go hungry.”
“Leo Hong” added, “Holding onto cash is the way to go!!! Don’t get duped… just sit back and watch them collapse.”
Another netizen, “Soon-to-graduate,” expressed, “The downward trend in housing prices is already apparent, like an airplane losing speed. Trying to recover from this nosedive is almost impossible. With decreasing birth rates and an unfavorable economic situation, most young people have limited income and are unwilling to become house slaves.”