Home sales were mixed on the mainland over the May Day weekend, with Shenzhen and Guangzhou recording buying interest after developers offered big discounts, but demand in other cities remained low.
Unconcerned by renewed fears that the government may impose further austerity measures to cool demand, potential buyers were lured to view projects offered at bargain prices in Shenzhen and Guangzhou.
Last Wednesday, the central government said it would study the costs and earnings of property projects in a bid to curb 'excessive profit' made by developers - sparking concerns that a new round of austerity measures may be in the pipeline.
Sentiment took a further knock yesterday after the China News Agency reported that banks may this month increase the initial down payment required from first-time home buyers in order to secure a home loan to 50 per cent of the purchase price, from the present 30 per cent.
But buyers responded positively to the second-phase launch by China Overseas Land and Investment of its Olympic City residences, in Longgang, Shenzhen, at prices cut by up to 20 per cent last Saturday, the start of the May Day holiday weekend.
The developer reported that nearly 5,000 potential buyers came to view the project and it sold more than 1,300 flats at an average price of 11,000 yuan (HK$13,145) per square metre, compared to the previous launch's 14,000 yuan per square metre.