Property market to stay cool in new year

Updated: 2011-12-30 07:37

By Wei Tian and Hu Yuanyuan (China Daily)

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 Property market to stay cool in new year

Newly constructed residential property sales in Beijing are expected to be about 90,000 units this year, 18 percent fewer than the 111,000 that were sold this past year and almost half of the 179,000 sold in 2009. An Xin / For China Daily

Reports indicate housing prices may decline as much as 20 percent

BEIJING - Restrictions on China's residential property market are causing it to experience its coldest winter in a decade.

And analysts say 2012 will be an even tougher year.

By Wednesday, sales contracts for 9.4 million sq m of new homes had been signed in Beijing and an estimated 9.5 million sq m worth are expected to be signed by the end of the year, according to a report by the Beijing-based Centaline China Property Research.

That area is 23 percent smaller than it was last year and is likely to be the smallest in the past 10 years.

The data are even less promising than they were during the 2008 downturn, when the total area contained in new homes sold was about 2 million sq m larger, the report showed.

This year is expected to see sales of about 90,000 new apartments and houses, 18 percent fewer than the 111,000 that were sold last year and almost half of the 179,000 sold in 2009.

Even so, 124,200 are still for sale, according to data from the Beijing property market regulator's website. That number has increased by one-third since the property restrictions took effect in February.

While fewer new properties are being sold than at any other time during the decade, the demand for used properties has also decreased greatly in the past three years.

The Beijing Construction Committee reported that 121,000 second-hand properties had been sold this year, 38 percent fewer than in 2010.

According to the latest statistics, the average price of second-hand properties in Beijing had stood at 21,550 yuan ($3,407) for a sq m by the end of November, 2.4 percent below what it had been in the previous month. That was the third month in a row that it had declined.

Meanwhile, Centaline said the prices on 99 percent of the properties now for sale in 730 new residential projects in Beijing have also stopped climbing and 116 of those properties are being offered at "obvious price cuts".

Those trends are not unique to the capital city.

The prices of homes in three other large cities - Shanghai, Shenzhen and Guangzhou - each decreased by 0.3 percent last month from October, the biggest monthly declines this year.

Centaline said Beijing's home prices may