China’s ‘Golden Week’ Home Sales Volume Falls as Monthly Prices Decline
Transactions in 20 major cities slipped by an average 32 percent from a year earlier during last week’s National Day holiday that’s also known as “golden week,” Soufun said in a report on Oct. 8. Home prices slid 0.03 percent in September from the previous month, the country’s biggest real estate website owner said.
The decline in sales volume last week, traditionally a peak period for developers, may mark a turning point for a property market that had defied the government’s efforts to contain surging home values, according to Credit Suisse Group AG. China is focusing the curbs on excessive gains in home prices in less- affluent cities, after boosting restrictions in metropolitan areas including Shanghai and Beijing.
“We expect further downside for both property prices and transaction volumes for the rest of the year,” said Jinsong Du, a Hong Kong-based property analyst for Credit Suisse. “But most developers were still not willing to cut prices beyond marketing gimmicks, hoping for the government to loosen the tightening measures soon.”
The chance that China will increase interest rates and the reserve requirement for banks in the fourth quarter is very small, with monetary policy possibly entering an “observation period,” the China Securities Journal said in a front-page editorial today.
Home sales in Shanghai dropped 40 percent to 85,400 square meters in the week ended Oct. 9 from the previous week, property consulting company Shanghai UWin Real Estate Information Services Co. said in an e-mailed report today.
A gauge tracking property shares in Shanghai Composite Index fell 2.7 percent at the close today to the lowest in 2 ½ years. It’s also the biggest decline among the five industry groups on the benchmark measure.
The country’s home prices will gradually ease because of rising inventories and a slump in property market transactions, the official Xinhua News Agency reported yesterday.
Transaction volume in the capital city of Beijing declined 10 percent in the first three quarters from the same time last year, while sales were down 5 percent in Shanghai, Soufun said.
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