May property sales plunge in Beijing, Shanghai, Shenzhen

10:49, June 02, 2010      

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Property sales in Beijing, Shanghai and Shenzhen fell as much as 70 percent in May as developers delay sales following government tightening measures.

In Beijing, property signings slumped nearly 70 percent to 3,357 in May from April, the Shanghai Securities News reported, citing data from the city’s housing regulator. In Shanghai, transactions may have dropped about 70 percent to 2,550 signings, the paper reported, and in Shenzhen, sales fell 62 percent.

China has restricted pre-sales by developers, curbed loans for third-home purchases, raised minimum mortgage rates and tightened down payment requirements for second-home purchases.

"The government should have put in tougher enforcement earlier to prevent the high prices," said Lu Qilin, a Shanghai-based researcher at UWin. "If the government doesn't stop this soon, the bubble will burst."

Copper, aluminum and zinc also declined on concern slumping property transactions and slowing manufacturing growth may hurt demand for commodities.

Real estate prices rose a record 12.8 percent in April from a year earlier, the National Bureau of Statistics said May 11. Transactions for new homes in Shanghai fell 56 percent in the month to May 16 from a month ago, to 520,000 square meters, Lu said.

Most developers are postponing project launch dates and are waiting to see market developments before finally pricing new projects, said Oscar Choi and Marco Sze, analysts at Citigroup Inc.

China's property market problems are worse than in the United States or the United Kingdom before the financial crisis, the Financial Times said yesterday, quoting an interview with Li Daokui, a member of the Chinese central bank’s monetary policy committee.

Source: Shenzhen Daily


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