China’s hottest real estate market freezes over as February home sales plunge 80 per cent amid a dearth of transactions during coronavirus outbreak

Shenzhen, mainland China’s hottest property market last year, has seen an 80 per cent decline in home sales amid the coronavirus epidemic, Hong Kong brokerage Midland Realty said.

The technology hub reported 1,667 sales of lived-in homes last month, down from 7,499 units and 10,000 units sold in January and December, respectively, the brokerage’s research unit said.

The city, often referred to as “China’s Silicon Valley”, reported a boom in home sales after being earmarked by Beijing in August last year as a new special economic zone where wide-ranging reforms would be carried out. The total number of transactions rose by 30 per cent between August and December, as buyers and investors bid big on its future prospects.

“We expected that the policies favouring Shenzhen would lead to robust sales until April this year. But this has stopped abruptly because of the coronavirus [outbreak], and it is hard to see when the market will bottom out,” said Fion He, director of Midland Realty’s research unit.

Developers have had to shut their sales centres since January. And market observers said they did not foresee the buzz generated by the property market in Shenzhen – as well as in the other eight mainland Chinese cities included in Beijing’s Greater Bay Area development plan – being replicated when a countrywide lockdown eventually lifts.