Aura of Olympic village apartments not immune to Beijing's slowdown
March 1, 2009
By Wing-Gar Cheng
The complex that housed the likes of swimmer Michael Phelps and sprinter Usain Bolt is 16km north of the city centre.
"It's nice to be next to the Olympic park and part of history too, but it offers nothing else," says 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, the general manager at Beijing Jia Hua Four Seasons International Exhibition, a property show organiser.
More than 1 400 Olympic village apartments - accounting for 55 percent of the 520 000mē available - were sold before mid-September, data from the Beijing municipal construction committee shows. The Beijing unit of Sys.Win Brokerage, which markets the properties, did not 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 metre compared with 25 000 yuan before the Games, according to Soufun.com and the city's construction commission.
House hunters and speculators had turned cautious because of the global economic and financial crisis, said Pan Shiyi, the chairman of Soho China, central Beijing's biggest property developer.
"Many families are watching their expenditure, especially for big-ticket spending like buying a property," Pan said. Beijing apartment prices would face increasing "downward pressures" this year.
Beijing's economy grew 9 percent last year compared with 12.3 percent in 2007, according to government figures. Keeping growth steady held "special priority" this year, mayor Guo Jinlong said in January.
The city government was pushing to "inject life" into the Olympic area by adding residential blocks and malls near stadiums, Long Cheng, the chief supervisor of the Sys.Win 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 organisers had raised 26.5 million yuan at seven auctions of vehicles and equipment used at the Olympics, said the China Beijing Equity Exchange, which handled the sales. Properties may become a tougher sell this year.
"In such uncertain times, I will hold back from buying more apartments," said Li, who has rented out only one of four units she bought in 2007. - Bloomberg
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