The launch of heavy restrictions on urban property markets has resulted in plunging transaction across China’s leading cities during the peak sales period of the October National Day vacation.
The weeklong holiday saw a decline in property sales for China’s major cities to a three-year low, with heavy drops posted in Beijing, Guangzhou and Shanghai.
Figures from Chinese data site 163.com indicates that the first eight days of October saw only 134 new home transactions in Beiing, for a year-on-year decline of 70%.
In Guangzhou there were only 541 property transactions during the same period for a year-on-year plunge of 89%, while the sale of 178 properties in Shanghai marked an 82% drop.
In addition to a heavy decline in sales volumes, Beijing has also seen a significant fall in housing price levels as a result of policies launched to curb speculative property investment.
Data from property services firm Anjuke.com indicates that the average price for the 20,600 pre-owned homes sold in Beijing during the first quarter was 55,000 yuan per square metre, for a decline of 10% compared to the second quarter.
Analysts expect muted transaction levels to persist for at least the next several months.
“It is expected that such a situation will continue for the rest of the year,” said Centaline Property analyst Zhang Dawei to China Daily.
Nearly 50 cities around China have launched property sales restriction policies since the start of the year in a bit to contain overheating housing markets.
Starting in March this year Beijing took the lead in the launch of property sales restrictions, with data from Centaline Property indicating that by May nearly 30 Chinese cities had followed its lead with the implementation of similar measures.
“More cities are taking steps to curb speculative demand in the housing market, an initial step towards a long-term solution allowing for the sustainable and steady development of the housing market,” said Deng Yusong, a researcher with the State Council’s Development Research Center.