Beijing home sales drop 25.2pc as Games suspend marketing efforts

PUBLISHED : Wednesday, 03 September, 2008, 12:00am
UPDATED : Wednesday, 03 September, 2008, 12:00am

Beijing was full of carnival atmosphere during the Olympic Games, however its property market remained in the doldrums as home sales fell 25.2 per cent last month, the lowest level in two years.

Data from the Beijing municipal government showed that 4,658 private-home transactions were recorded in the capital city in August. Sales volume fell 32.6 per cent to 525,309 square metres.

The fall in home sales was especially obvious during the Olympic Games.

The market recorded a daily average of 86 deals - with a total gross floor area of 9,293 square metres - between August 8 and August 24. This compared with a daily average of 128 deals - with a total gross floor area of 13,657 sq metres - for all of August.

Li Wenjie, general manager at Centaline (China), said transactions dropped because promotions and advertising for new projects were put on hold during the staging of the Games.

He expected home sales would rebound this year to the level of June or July.

Property prices remained firm, according to government figures.

However, Mr Li estimated property prices in the primary and secondary markets dropped 5 per cent last month.

'Developers continued to offer discounts to buyers while individual flat owners have to cut asking prices to attract buyers,' he said.

According to Centaline, property prices in Beijing have dropped about 15 per cent since the central government instituted cooling measures in October last year.

The municipal government expected at least 37 new residential projects would be launched in the capital this month.

Mr Li believed developers would offer aggressive discounts to lure buyers because of the surge in new supply.

He expected property prices in Beijing would drop a further 10 per cent by the end of this year.