UNDER the housing policies released in October by local authorities to tame the skyrocketing housing prices, an increasing number of real estate investors have started to sell off some of their properties to “play it safe,” the China Times reported.

    An investor identified as Ah Zu recently sold an apartment in Pingshan District for 2.2 million yuan (US$320,000). It was one of the two apartments he purchased with 2.3 million yuan in 2015, which means that Ah Zu now owns an apartment after effectively spending only 100,000 yuan.

    It was an experienced investor who goes by the nickname of Brother Wu who told Ah Zu to sell one of the apartments. He told Ah Zu that the principal of investing in the real estate market was that “safety comes first then profit.”

    Under the instruction of Brother Wu, Ah Zu borrowed money from a bank and relatives to pay the down payment on a smaller apartment in Pingshan in 2012. The apartment’s price doubled in three years and it was then that Ah Zu sold the property and earned around 600,000 to 700,000 yuan on the investment.

    With the money he earned, Ah Zu then purchased the other two properties in 2015 and the price doubled again in only one year.

    However, as the local government started to worry about the uncontrollable housing prices and rolled out restraining policies to cool down the market in March and October last year, Ah Zu decided to play it safe with Brother Wu’s advice. So he sold one of the properties.

    “Now even if the government releases more policies to suppress the housing prices, I will not worry about losing money,” said Ah Zu.

    Like Ah Zu, a number of investors have started to sell properties to cash out, as prices of pre-owned homes in the city see declines. Brother Wu sold an apartment at a price 10 percent lower than last year. However, Brother Wu said the current situation was not as bad as 2008 when the market experienced a large drop in prices under a gloomy economic environment and a lack of homebuyers.

    According to official data, around 40 percent of homebuyers were investors in Shenzhen and over 60 percent of the homebuyers were under loan pressure, so most of them will face challenges in acquiring enough cash to deal with the unstable real estate market in the face of restraining policies.

    Brother Wu said that the future direction of the market depends on the government policies. If authorities remain tough on the policies, most of the investors will risk cash shortages.

    However, Brother Wu said that since the policies were apparently orchestrated by the Central Government with the purpose of limiting speculators in the market, he is not sure when the restrictions will ease.

    (Zhang Qian)