New policies cool housing markets

Property markets in China's first-tier cities cooled down over the May holiday, which is traditionally a hot season for property developers. Analysts pointed out that it was the result China's new policies to curb surging housing prices.

Beijing: Transactions dropped 82 percent

Beijing Municipal Government on April 30 released a new policy that allows one family to purchase only one commercial residential house. Based on past experience, it should reduce market demand by over 30 percent.

Data from bjfdc.gov.cn showed that second-hand housing transactions in the first two days of May were only 422 houses, 82 percent lower compared with the April average of 1,164 houses.

From April 19 to April 27, only 1 new home was sold. Demand for second-hand housing dropped over 80 percent in the second half of April.

Shanghai: Wait and see

A housing exhibition in the first three days of May in Shanghai witnessed only small transactions, and most people are just waiting to see how markets will react. Over 220 housing developers participated in the exhibition and focused on small and medium-sized houses, but none of them cut prices.

Since the central government released new policies to curb housing prices in mid-April, housing transactions dropped significantly. Only 379,900 square meters of houses were sold during the second half of April.

Meanwhile, housing supply has grown rapidly. New commercial residential housing supply increased by over 60 percent compared with March, to 1.27 million square meters.

Guangzhou: Average prices dip 20 percent

Data from an official Web site in Guangzhou showed that new home sales volume dropped by half in the first two days of May and housing prices fell around 20 percent compared with the previous two months.

The dull market pushed housing developers to start sales promotions. Some even lowered housing prices by 3,000 yuan (around 440 U.S. dollars) per square meter. But the effect of their actions is still unknown.

Hangzhou: An era of confusion

The hot housing market in Hangzhou reversed in late April, with daily transactions dropping from more than 300 houses to lower than 100.

Housing developers are unwilling to start sales of new home projects in Hangzhou. The expected "red hot" May is likely to be a silent period for housing developers.

As local government authorities and banking institutions hold different standards for the new policy, potential home buyers got confused.

By People's Daily Online