China Market Update

Posted by David Pao
May 16th, 2011

Jeff Li

The Chinese government issued rules that restrict real estate investing in major cities about half a year ago. Residents in major Chinese cities are permitted to buy a second apartment, but were required to put a larger down payment in order to receive the preferential loan rates. With skyrocketing real estate prices in major Chinese cities, it has become too expensive for average citizens and the younger generation.

Once these regulations were put into effect, the effects were soon felt in several industries, especially for building and construction. While China continues to demand higher volumes of SPF and Hemfir lumber from Canada, this sector has been impacted as well.

After speaking to several key importers of Canadian softwood lumber, it seems that many are having a difficult time. Chinese demand has not been as high as expected and there are growing levels of inventory in Eastern China. In addition, the log prices from Russia have also been decreasing which will bring more competition for Canadian species

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