Chinese Cities See Transaction Floorspace Plunge During Peak Season for Home Sales
25 municipal governments around China issued a total of 34 property control policies in October, serving to drag transaction levels during the traditional peak season to record lows.
The “October Housing Transaction Report” (10月住宅成交报告) released by the Shanghai E-House Real Estate Research Institute indicates that China’s total transaction floorspace for September and October – traditionally considered the market’s peak period, was 45.42 million square metres, for a drop of 30.3% compared to 65.13 million square metres for the same period last year.
For first tier cities total transaction floor space was 3.34 million square metres for September and October, hitting its lowest level since 2008.
Research by the China Index Academy (中国指数研究院) has produced similar results, with its data indicating that the transaction floorspace for 29 cities monitored saw a month-on-month decline of 3.61% in October, and a year-on-year drop of 32.36%.
According to its figures first-tier city transaction floorspace fell 12.96% compared to the preceding month, and a year-on-year drop of 50.41%.
Shanghai saw the biggest month-on-month decline in transaction floorspace, with a drop of 34.62%, while Beijing, Shanghai and Guangzhou all saw year-on-year declines of over 40%.
The transaction floorspace of representative second-tier cities fell 2.59% on the month in October, while posting a year-on-year decline of 27.93%, while representative third-tier cities saw declines of 1.01% on the month, and 33.65% on the year.
Data from Centaline Property has also indicated that Beijing new home transactions fell to 20,550 in October, for a 50.6% drop compared to the same period last year, as well as the lowest level in the near-ten year period since compilation of online data commenced.
Centaline chief analyst Zhang Dawei said to Securities Daily that over the past year Beijing had issued a record number of real estate control policies, launching over 30 measures in under twelve months.
Beijing isn’t alone, with Centaline data indicating that as many as 52 property control policies were issued in September ( including both local governments and central government departments), while in October over 25 municipal governments around China issued a total of 34 property market control policies, with almost 20 pertaining to leasing.
According to the China Index Academy the flurry of property control policies issued by hot spot cities towards the end of September began to drag down transaction levels significantly by the first week of October, leading to a marked month-on-month drop.