Economy

Property market fails to fizz in Golden Week: Analysis

By Wang Huazhong (China Daily)
Updated: 2010-10-06 09:22

BEIJING - The usual rush to snap up property during the National Day holiday, an annual peak time that sales offices had hoped would help the market rebound from the State's price-cooling policies, has so far failed to materialize this year, according to official data.

Potential homebuyers look at models of apartment buildings at a real estate sales office in Haikou, capital of Hainan province, on Oct 2, 2010. [Photo/Xinhua]

Experts predict the latest move to curb property speculation and tighten regulations on developers' liquidity issued on Sept 30 will lead to the "coldest" Golden Week holiday, as well as an uncertain month for those in the industry.

Figures from the Beijing Real Estate Trade Management Network show average sales in the capital reached just 116 homes per day for the first three days of October, falling far short of the last four days of September, when 635, 852, 560 and 573 homes were sold respectively.

The cheerless sales performance looks even worse when compared to the fact more than 7,300 new homes across 17 projects went on the market between Sept 28 and Oct 2.

Sales of second-hand homes in Beijing also tumbled from 1,067 on Sept 30 to just 18 on Oct 1 and 2, when people began viewing and signing contracts during the holiday, official data shows.

In Shanghai, some developers are offering discounts of up to 100,000 yuan ($14,900) at the Holiday Housing Market, Autumn Home Exhibition, a "barometer" of the city's property market.

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Enthusiasm to buy in Hangzhou, capital of East China's Zhejiang province, has also been dampened by the new central government policy by more than 90 percent, with the number of pre-sale deposits paid to developers falling from 361 on Sept 29 to 31 on Sept 30, local media reported.

Discounts and other promotions, such as offering extra space, decorations and electronic appliances for free, are also being offered at a reportedly "tepid" property exhibition in the island province of Hainan.

To cool housing prices further, the Chinese government suspended bank loans for third-home purchases beginning Oct 1 and plans to extend property taxes throughout the country. All first-home buyers also now have to pay a down payment of at least 30 percent of the purchase price.

A survey conducted at the Autumn Home Exhibition found that 87.5 percent of buyers feel the market trend is not clear and agreed it is difficult to tell if now is the right time to buy, Shanghai-based Orient Morning Post reported on Tuesday.