Property market remains gloomy during Golden Week

Updated: 2011-10-08 17:18


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BEIJING - China's big cities, notorious for their skyhigh housing prices, reported decreases in apartment sales during the weeklong National Day holiday, signalling continous downturn in a traditionally boom season for the real estate market.

Apartments sales in Beijing dropped 22.8 percent from a year ago during the holiday from October 1 to 7, which is called a "Golden Week", according to statistics released on Saturday by the Beijing Real Estate Association.

The total number of residential apartments sold in Beijing in the period was 1,039, including 908 newly built units and 131 second-hand units, according to the statistics.

The figure also represented a 62-percent decline from the same period in September.

September and October are traditionally seen as "boom months" for the city's real estate market. This year's poor fall sales may signal the arrival of a turning point in the city's overheated property market, according to Chen Guoqiang, vice chairman of the China Real Estate Society.

Real estate analysts said that the chilly housing market will make it difficult for developers to secure financing, which will in turn lead to decreased housing prices, which have more than tripled in Beijing over the last five years.

From January to August, the average price of a residential apartment in Beijing was 13,874 yuan (2,172 U.S. dollars) per square meter, a 6.6-percent decrease compared to the average price of 14,847 yuan per square meter in 2010.

"In spite of these apparent signals, the real turning point will come if Beijing maintains and strengthens its control policies for the property market," Chen said.

Beijing was not the only city to experience a downturn in housing sales. Daily housing sales in Shanghai stood at an average of 100 units during the holiday week, while in the cities of Guangzhou and Hangzhou, daily sales figures remained in the double-digits.

The government has launched a series of policies to rein in skyrocketing housing prices, including establishing purchase limits in large cities, reducing liquidity, requiring higher down payments for home purchases, introducing property taxes in several cities and building low-income housing projects.

The real estate market's poor performance during the holiday may be an extention of the decreased sales seen in September, according to Hu Jinghui, a senior real estate expert with B.A. Consulting.

Hu said that policy restrictions on prospective homeowners and expectations for price decreases may explain the market's current performance.