Region shrugs off buying curbs

PUBLISHED : Monday, 17 October, 2011, 12:00am
UPDATED : Monday, 17 October, 2011, 12:00am

Home sales in northeast China are showing more resilience to the central government's tight controls on the property market than southern and coastal regions, with prices rising steadily despite a decline in sales.

'I can't say that the increase in property prices has slowed because of tighter controls. None of us can find flats that are affordable,' said Wilda Wang Wei, a resident in Changchun, Jilin province.

Wang, who plans to marry her boyfriend next year, said they had been hunting for a flat in the industrial city, where the prices of new homes have more than doubled to between 6,000 yuan (HK$7,310) and 7,000 yuan per square metre.

Three years ago, prices were about 3,000 yuan per square metre. Now, Wang said, they could only afford a flat far from the city centre.

New flats in the city centre cost about 7,000 to 8,000 yuan per square metre while those in the outskirts of the city are about 5,000 to 6,000 yuan per square metre.

Wang is looking for a unit with a size of about 90 square metres.

Although prices in Changchun are low compared with those in bigger mainland cities, she still finds flats in Changchun prohibitively expensive.

As a telephone operator earning slightly more than 2,000 yuan a month, Wang said she was in the same position as many other city dwellers who were finding it hard to buy their own homes.

She said a colleague, whose three-year-old son will soon enter kindergarten, was struggling to buy a flat near good schools.

'Everyone is trying to buy now even though prices are high because they fear property will only get more expensive. I wish the government can do something to at least maintain home prices at the current level,' she said.

China Overseas Land & Investment, one of the largest developers in the country, said prices in Changchun rose about 10 to 15 per cent in the past 12 months. The average selling price of the company's properties grew about 18 per cent to 8,400 yuan per square metre. The average price of a home in the city is about 6,830 yuan per square metre.

'Urbanisation has driven demand for flats [in the northeast region] from end-users. Despite sales slowing because of the austerity measures, such as purchase restrictions, home prices in Changchun are still growing steadily,' said Du Dazhi, a marketing and planning manager at China Overseas.

The company sold 2.1 billion yuan worth of flats so far this year, equivalent to 87.5 per cent of its annual sales target of 2.4 billion yuan for the city, Du said.

According to its sales data for last month, the northeast region including Changchun, Shenyang, Dalian and Qingdao recorded the strongest sales in terms of floor area - 146,700 sq metres. The figure, however, was down 9.8 per cent year on year. Tightening measures have not hit the market in Shenyang, the capital of Liaoning province, where flat prices are still low compared with other regions. Most buyers are end-users, who are not affected by the restrictions.

Liu Wendong, a director of China Overseas' office in Shenyang, said it had reached its full-year sales target of 5.2 billion yuan, having sold flats totalling 650,000 sq metres.

By the end of the year, sales might reach 6.24 billion yuan to exceed the target by 20 per cent, Liu said.

The average price of the company's flats rose about 30 per cent to almost 8,000 yuan per square metre.