Source:
South China Morning Post (Hong Kong)Sandy Li and Yvonne Liu in Beijing
May 12, 2010
Mainland home prices have tumbled by as much as 19 per cent this month as developers resort to wide-scale price discounting in a bid to lure wary buyers back to the stagnating property market.
Guangzhou-based Evergrande Real Estate Group (SEHK: 3333) fired the first salvo in the latest discount war on May 5 when it said it was slashing prices in 40 projects in 20 cities by 15 per cent until Sunday. Other developers followed suit and prices of units in projects being launched in Shanghai, Beijing and Nanjing have been cut by as much as 19 per cent.
The discounts are in response to a sharp fall in sales since the April 16 crackdown on credit to the housing market, with measures that included higher initial down payments and tighter loan conditions for buyers of second homes. "Buyers are still waiting on the sidelines as they expect prices will have to fall further," said Anson Li, the general manager at the Shanghai branch of Hong Kong-listed property agency, Midland Realty.
He said most of the developments being offered at lower prices were located on the outskirts of Shanghai, where home values had surged by as much as 33 per cent since January. Prices in the city centre, by contrast, had so far remained firm.
....But buyers remained reluctant to return to the market, said Li, who believed that home prices in the outlying areas would have to drop by 30 to 50 per cent before they came back. .... The price cut came after property transactions plunged 70 per cent across the country as buying interest evaporated after the introduction of measures to curb demand and price growth..... However, the discounts had not triggered any jump in sales, agents said. "You won't find any leaflets in the sales office about the price cut. Developers are trying to keep it low profile to avoid protests from buyers who bought their units earlier," an agent said.
Read more:
http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=035e4ae394788210VgnVCM100000360a0a0aRCRD&ss=Property&s=Business
Home prices on mainland may fall 30pcBloomberg
May 09, 2010
Mainland home prices may slump 30 per cent as local authorities implement government measures to crack down on property speculation, according to brokerages including China Jianyin Investment Securities.
Home sales plunged nearly 40 per cent by both units and floor space in 15 major cities recently, extending a streak of declines since mid-April, according to Zheshang Securities.
The government this month raised banks' reserve ratio for the third time this year, adding to last month's down payment and interest rate increases on second mortgages.
....Home prices in first-tier cities will drop by 30 per cent, according to China Jianyin analyst Xing Weiwei. Shenyin Wanguo Research and Consulting analyst Kris Li said a 20 per cent drop without the introduction of a property tax and a 30 per cent decline with the tax, would be reasonable following declines in volume.
....The average price of new flats in Shenzhen surged by 86.4 per cent from a year earlier in March, Xinhua reported on April 1, citing government data. Contracted sales in the city dropped 42 per cent in the last week of April from the preceding seven days and were 80 per cent down from 2009's average, according to Changjiang Securities.
http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=8b22a1da4d778210VgnVCM100000360a0a0aRCRD&ss=Property&s=Business