A new report points to a sharp decline in new home transactions in Chinese cities for the opening half of July.
The report released by Shanghai E-House Real Estate Research Institute indicates that the new commercial housing transaction area for the 50 Chinese cities that it monitors was 11.36 million square metres for the first half of the month, for a decline of 2% compared to the first half of June and a drop of 20% compared to the same period last year.
According to the report 30 out of the 50 cities monitored by Shanghai E-House saw transaction area declines compared in the first half of July compared to June, with An’qing, Langfang and Huizhou posting the biggest declines of 41%, 37% and 37% respectively.
33 of the 50 cities monitored saw year-on-year declines in transaction areas, chief amongst them Beijing, Fuzhou and Langfang, with falls of 74%, 69% and 66% respectively.
Shanghai E-House researcher Lai Qin said that the implementation of the central government’s “five restrictions” policy is having a pronounced impact upon the property market, with a gradually stabilisation in transactions at low-medium levels relative to historical data since the start of 2016.
Broken down in terms of tier categories, first-tier, second-tier and third-tier cities saw growth in new commercial housing transaction areas of -8%, 8% and -13% respectively in the first half of July compared to the preceding month, as well as year-on-year declines of 56%, 12% and 18% respectively.
According to Lai Qin the heavy decline in first-tier city transaction levels is primarily due to the extremely strict property market controls imposed upon those urban areas, such as hikes in lending rates.
Prices gains are also easing in tandem with the drop in transaction volume, with new housing price data released by the National Bureau of Statistics for 15 first-tier and hot-spot second tier cities this month revealing a drop in price growth across the board.