Golden season turns to bronze
Updated: 2011-10-01 08:00
By Wang Ying and Hu Yuanyuan (China Daily)
SHANGHAI - September and October are usually viewed by property salespeople as the best months to promote their products, but the traditional peak season for the housing market, nicknamed "Golden September and Silver October", is losing its sheen this year.
A slew of curbs on property market purchases, including the introduction of property taxes, stricter downpayment requirements and higher mortgage rates, have battered buying sentiment in major cities.
The crowds of homebuyers are gone and the latest housing fairs in Beijing and Shanghai saw sluggish trading volume.
Statistics from the Shanghai-based Uwin Real Estate Research Center shows that during the first 11 trading days in September, Shanghai municipality realized a turnover of 191,700 sq m in newly built commercial residences, nearly half the turnover during the same period in recent years.
"The turnover in the first 11 days this month dropped 52.34 percent from last year's 402,100 sq m," said Huang Zhijian, executive director of the Uwin Real Estate Research Center.
As of Sept 13, about 200,000 sq m were sold, a fall of almost half from last year's 430,000 sq m and 2009's 580,000 sq m, hitting a record low, said Lu Qilin, research director at Shanghai Deovolente Realty.
During September's three-day Mid-Autumn Festival holiday, only 407 contracts were signed for residential apartments in Beijing, representing a 70-percent decline compared with a similar three-day holiday in May, and a 50-percent decline from the corresponding period last year, according to the Beijing municipal commission of housing and urban-rural development.
"Due to the standstill in property trading, it is certain that there will be more discounts and special offers during the National Holiday housing fair compared with the May Day housing fair. But that doesn't mean a rebound in trading volume, especially as many developers are tending to be more conservative toward prices and sales," said Song Huiyong, research director with Shanghai Centaline Property Consultants Ltd.
In fact, some property developers have taken different measures to boost sales amid the pessimistic outlook.
The management of Franshion Properties Ltd, the developer of Jinmao Mansion - the bestselling property in Beijing's high-end residential projects this year - has been hesitant when pricing its second phase of products.
"The market is really hard to call now, even for projects with a prime location," said a senior manager who declined to be named. "What we can do is to introduce more value-added elements, such as rich educational resources and improved decorations, while keeping the price competitive in the market."
Runfeng Real Estate Co Ltd launched 100 units of bargain-priced dwellings in September with a starting price of 13,000 yuan ($2,000) a square meter, down 5,000 yuan from the project's initial sq m price in May.
"We've seen downward pressure clearly, especially for projects in the suburban areas," said Zheng Deqiang, Runfeng Real Estate's deputy general manager.
According to Zheng, more than 200 families had registered to purchase the project within a week of the company announcing the price-cut plan, indicating that market demand remains strong.
Ba Shusong, deputy head of the Institute of Financial Studies at the Development Research Center of the State Council believes that if the tightening policies and economic environment remain unchanged, the gap between available homes and agreed that deals will reach a new peak.