Property developers have slowed down the pace of new projects after robust sales in the first half. [CFP]
Property sales across 30 cities in China fell 4 percent in July as prices soared and supplies dwindled with big cities feeling the pinch for the first time this year, analysts said.
According to the UWIN property transaction system, the floor space of apartments sold in July dipped 5.37 percent over June to 1.04 million sq m.
Statistics put out by the Beijing Real Estate Transaction website showed that sales of forward delivery housing in Beijing fell to 10,862 units last month, compared to 12,840 units in June.
Property transactions in Guangzhou fell 36 percent over June. The figure is only half of that of May, said Guangzhou's official property website.
"The fall has been triggered by high property prices and shrinking supplies in some cities," said Qin Xiaomei, head of research, Jones Lang LaSalle Beijing. "Property developers have slowed down the pace of new projects in the second half after robust sales in the first half," she said.
Property prices in China's 70 major cities were up 0.8 percent in June, the fourth month-on-month growth in a row this year, according to statistics from the National Development and Reform Commission.
Beijing and Shanghai reported a month-on-month growth of 0.4 and 1 percentage points respectively in June, with prices skyrocketing to record highs of 2007 in some areas, fueled by strong investment, purchase demand and higher land prices.
The high prices have also made most of the prospective buyers wary of making fresh investments.
Li Wei, a 29-year-old company executive in Beijing, said he would prefer to adopt a wait-and-see attitude as the high prices have made most of his preferred apartments unaffordable.
"The unit price of the apartment has soared to 20,000 yuan per sq m from 14,500 yuan per sq m 40 days ago," Li said.
For others like Zhang Li, a property speculator from Wenzhou, Zhejiang province, this is the time to cash in. The apartment she bought in November last year has gained 40 percent in the past six months, largely exceeding her expectations.
"I am a bit uneasy with such a rapid increase in such a short period of time," said Zhang, who has property investment experience of more than a decade. "With people's income and economic fundamentals seeing no big change, I think selling the property will be a safer bet."
According to Grant Ji, director of Savills (Beijing), a UK-based real estate service provider, the fall in transaction volume is still within a normal band.
"July was an off-season for the housing market," said Ji.
"With no big shift likely in the macroeconomic policy during the second half, property prices are unlikely see a big fall as the market is still awash with funds," Ji said.