Real Estate: Soaring Growth to Stall on Market Pause

The jury may still be out on whether China’s real estate market will correct, and by how much if it does, but one thing is clear: the current climate of uncertainty has consumers and developers alike holding back from putting up their properties for sale. That means that real estate companies themselves, like Vanke (Shenzhen: 000002), as well as real estate Websites like E-House (NYSE: EJ), Soufun (NYSE: SFUN) and China Real Estate Investment Corp (Nasdaq: CRIC) could be in for some shaky times in the next few quarters as the sales volumes that have fueled their soaring growth dry up. That’s not to say that the boom times are over for good. But at least in the first half of this year don’t look for any stellar acceleration in these companies. Don’t look for much cheer from the developers either if the bubble does burst and panic selling sets in, though such a sell-off could play to the benefit of the websites, at least in the short term.