China April Home Sales Fall 13% as Property Curbs Take Toll

China’s home sales transaction value fell 13 percent in April from the previous month as the government’s new property curbs started to take effect.

The value of homes sold declined to 494.6 billion yuan ($80 billion) from 569.4 billion yuan in March, according to the difference between National Statistics Bureau data for the first four months of the year and the first quarter. The value of sales from January to April rose 65 percent to 1.69 trillion yuan from a year earlier, the data showed.

Thirty-five city governments issued details of property measures by an April 1 deadline in response to the central government’s toughest property curbs in a year imposed in March. They include ordering the central bank to raise down-payment requirements and interest rates for second mortgages in cities with excessive price gains and enforcing a property-sales tax.

“The decline largely had to do with the high March sales because developers supplied a lot of homes ahead of the government’s curbs,” said Jeffrey Gao, a Shanghai-based property analyst at Macquarie Capital Securities. “But the government may issue more harsh policies if home prices continue to climb.”

Investments in homes, office buildings, malls and other real estate gained 21 percent to 1.9 trillion yuan from January through April, compared with a 19 percent increase a year earlier, according to the statistics bureau. New property construction rose 1.9 percent to 555 million square meters (6 billion square feet).

Slowing Sales

Moody’s Investors Service and Standard & Poor’s both said last week that the government curbs will slow down property sales growth this year.

China Vanke Co. (000002), the country’s biggest developer listed on mainland exchanges, said contracted sales last month fell 18 percent from March to 12.4 billion yuan. Shimao Property Holdings Ltd. (813), a Shanghai-based developer of mostly high-end homes and hotels, last week reported April sales falling 28 percent to 4.6 billion yuan.

China is studying “long-term” measures to control the country’s property prices, while the 20 percent property transaction tax will be difficult to enforce in many cities, the official Xinhua News Agency reported today, citing unidentified people.

The Shanghai Stock Exchange Property Index fell 0.5 percent at the close of trading, the biggest decline among five industry groups on the benchmark Shanghai Composite Index, which lost 0.2 percent.

Home sales volume rose 41 percent in the first four months to 268 million square meters from last year, according to today’s data.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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