Realty price growth slows down in July

08:37, August 11, 2010      

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A worker waters a tree outside the construction site of a high-end apartment complex in Beijing's Central Business District. Jason Lee / Reuters

Property prices in China rose at a slower pace in July as the government's tightening measures continued, with industry experts expecting further falls in the next few months.

Housing prices in the nation's 70 major cities grew 10.3 percent year-on-year last month, down from 11.4 percent in June, 12.4 percent in May and 12.8 percent in April, the National Bureau of Statistics (NBS) said on Tuesday. The figure marked the slowest growth pace since February this year.

However, on a monthly basis, property prices remained unchanged from June, the first decrease in 16 months.

"With more supplies expected in the second half and realtors looking to end the year on a robust note, prices are likely to decline in the next few months," said Qin Xiaomei, chief researcher with property consultancy Jones Lang LaSalle Beijing.

Vanke, the nation's largest property developer, said on Monday that it has completed only 25.4 percent of the planned floor space in the first six months, and expects the balance to be completed in the second half.

Gemdale, another leading property developer, said around 2 million square meters of floor space will be available for sale in the coming months, compared with the 572,100 sq m it sold between January and July.

Lin Lei, marketing chief of Century 21, a US-listed real estate brokerage, said the year-on-year price growth will decline in the second half due to the high base since August 2009.

"Realtors are getting fewer funds from lenders, but newly started floor space has continued to grow. Cash flows will gradually tighten and they (realtors) will have no choice but to offer discounts to push sales," said Lin.

Property developers raised 3.89 trillion yuan ($574 billion) of funds from January to July, the NBS said.

Nearly 1.44 trillion yuan was raised by the companies themselves, while 753.9 billion yuan came from bank loans and 513.1 billion yuan from individual mortgages. The floor space of newly started housing increased by 67.7 percent to 922 million sq m in the first seven months of this year.

Vanke President Yu Liang said the company will take various steps to stimulate sales, based on customers' expectations of rational prices.

Huang Juncan, president of Gemdale, said the company will adopt a flexible pricing strategy to boost sales.

The value of commercial house sales in July fell 19.3 percent to 306.6 billion yuan from a year earlier. In terms of floor area, the decline was 15.4 percent from a year earlier to 64.7 million sq m.

With more price declines on the anvil, transaction volumes will rebound to rational levels, said Xu Jiajun, secretary-general of Gemdale.

Source:China Daily


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