New home sales drop in first four months

By Cherry Cao | May 13, 2014, Tuesday |

Online Edition

NEW home sales in China declined at a faster rate in the first four months of this year by both value and volume amid easing sentiment among home buyers.

The value of new homes sold across the country dropped 9.9 percent from the same period a year earlier to 1.53 trillion yuan (US$246.8 billion) during the January-April period, the National Bureau of Statistics said on its website. In the first quarter, the value fell 7.7 percent year on year.

The volume of new homes sold dropped 8.6 percent from a year ago to 245.2 million square meters while it shed 5.7 percent in the first three months.

Tighter credit at commercial banks and policy loosening in some non major cities have pushed more home seekers to the sidelines, industry analysts said earlier.

Cautious sentiment also prevailed among real estate developers.

Investment in housing developments rose 16.6 percent year on year to 1.53 trillion yuan across the country between January and April, compared to a 16.8 percent rise in the first quarter and an 18.4 percent increase in the first two months, the bureau's data showed.

"It is no surprise that optimism is fading among developers after sluggish sales were registered over the past few months," said Yan Yuejin, an analyst at E-House China R&D Institute. "Developers should prioritize the unloading of inventories right now rather than worry about expanding."

An E-House report found new home inventories in 35 major Chinese cities surged 19.5 percent year on year as of April. Among them, 28 cities recorded annual growth, with Nanchang, Jinan and Ningbo leading all others with a year-on-year increase of 68.6 percent, 63.8 percent and 56.8 percent, respectively.

Business Real Estate

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New home sales drop in first four months

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