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This China Center Chart of the Week shows the composition of costs for newly constructed residential and non-residential buildings in China in 2013. Despite the apparent weakening of buyer sentiment towards real estate in China, average prices of newly constructed apartments reportedly dropped by only 3.2 percent in 2013, even though sales of new apartments reportedly dropped by 8.9 percent. Our research shows that the prices for new units – both residential and non residential – are effectively floored, for the time being, by low developer margins that have little room to further decrease. The data suggest that developers cannot reduce pricing by more than 9 percent and still break even. All the other costs in the pricing structure are sunk.