China Housing Markets Posts Disappointing Numbers in September
The China housing market posted disappointing numbers for the month of September with home sales down in major China cities.
Home sale transactions posted a meager increase of 1.4 percent in 10 major China cities, states South China Morning Post (SCMP). The numbers are based on SCMP's latest Creda Index, which showed that home sales dragged in eight cities, while Beijing and Shenzhen experienced double-digit drops in sale transactions, at 26.2 percent and 24.4 percent, respectively. Apart from the fall in Beijing and Shenzhen's home sales, the primary home prices also dipped in three of the four tier-1 cities in China. Cities such as Guangzhou, Shenzhen and Shanghai posted a decrease in home prices, with rates falling to 5.6 percent, 3.5 percent and 0.9 percent, respectively. Only Beijing recorded a big jump in home prices among the cities, with home prices up 7.1 percent. This is the highest level in monthly home price increase recorded in the capital city since March this year.
Chen Sheng, China Real Estate Data Academy Dean and a partner of the SCMP Creda Index, said that the disappointing September numbers are set to increase the pressure on real estate developers. He added, "The fourth quarter will be their last chance and developers will undoubtedly increase supply and take more diversified and active steps to speed up destocking and increase sales revenues."
Meanwhile, real estate developer and Chairman of the Hang Lung Properties Ltd., Ronnie Chan, recently told Forbes that the real estate market in China's mainland has already shown signs of life last September. This is supported by the high mortgage rates in Shanghai posted in September, along with the 18.8 percent increase in home sales from January until August. Chan stated that the mainland real estate market was also showing signs of maturity. He also commented on the oversupply of housing units especially in the second and third tier cities, however, he mentioned that the situation is "not a bad scene at all."
He explained, "It's about working out the excesses, and there are vast excesses... But prices are rising to an acceptable level. It's not a bad scene at all. To the contrary, the residential real estate market, in particular, is doing well."