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Decline in the sales of new homes speeds up
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NEW home sales in China fell at a faster pace in the first five months of this year in both value and volume as caution continued to be the watchword for the country’s lackluster housing market.
The value of new residential properties sold fell 10.2 percent from the same period a year earlier to 1.97 trillion yuan (US$318 billion), the National Bureau of Statistics said yesterday. That compared with a 9.9 percent drop registered in the first four months. Transaction volume dropped 9.2 percent from a year ago to 319.5 million square meters, while it shed 8.6 percent in the first four months.
Capital invested in housing development rose 14.6 percent year on year to 2.1 trillion yuan across the country between January and May, compared with a 16.6 percent gain in the first four months and a 16.8 percent rise in the first quarter, the bureau’s data showed.
“I don’t expect to see any major rebound in sentiment among both real estate developers and home seekers until September or October, which is usually the best season for home sales in China,” said Lu Qilin, a researcher at Shanghai Deovolente Realty Co.
Sluggish momentum prevailed around the country over the past few months with developers and buyers both sitting on the sidelines as credit at commercial banks remained tight and wait-and-see sentiment prevailed.
As the property sector drives more than 15 percent of China’s economy, a prolonged or steeper decline will likely influence whether there is the risk of a shallow or a deeper downturn, jeopardizing this year’s 7.5 percent growth target.
China’s housing market may have encountered a correction after home prices fell in May for the first time in two years, an indicator of extremely slack buying sentiment, according to an earlier industry report.
The average price of new homes in 100 cities dipped 0.32 percent from April to 10,978 yuan per square meter last month, the first decline since June 2012, the China Index Academy said.
In Shanghai, the volume of new homes sold, excluding government-funded affordable housing, fell 34.9 percent in May compared with the previous year, according to Shanghai Uwin Real Estate Information Services Co.
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