Mainland home sales drop further
The property downturn on the mainland continues unabated, with home sales in the first quarter dropping 17.5 per cent to 709.9 billion yuan (HK$874.4 billion) from the same period last year, according to the statistics bureau.
With the central government maintaining measures to cool the market, overall property sales, including commercial buildings, fell 14.6 per cent to 867.2 billion yuan.
The dismal property market data came on a day Beijing announced the slowest quarterly economic growth in three years.
'Home prices will correct further for the rest of the year,' said Thomas Lam, the head of greater China research at Knight Frank.
'With sales slowing and inventories rising, developers face growing pressure to cut prices,' said Lam, adding that he expected a further decline of 10 per cent in home prices in first-tier cities and a 15 per cent drop in second-tier ones.
According to the statistics bureau, sales in terms of gross floor area fell 13.6 per cent year on year to 152.39 million square metres in the first quarter. Residential property sales saw a steeper drop of 15.5 per cent to 133.87 million square metres.
Properties available for sale rose 35.5 per cent to 301.22 million square metres, 9.4 percentage points higher than in the same period last year.
New-property construction increased 0.3 per cent to 399.5 million square metres, including residential construction that dropped 5.2 per cent to 294.27 million square metres.
'The housing market is falling steadily,' said Sheng Laiyun, a spokesman for the bureau.
Efforts to check property bubbles would affect related investments and consumption, and hence economic growth, said Sheng.
The goal of the property curbs was for sustainable economic growth in the long run, he said.
David Ng, a property analyst at Macquarie Equities Research, said in a recent research report the mainland property market was still weak.
Ng said policy relaxations or credit loosening would be needed to revive the market.
The mainland media on Thursday reported that banks in major cities such as Beijing, Shanghai and Guangzhou were offering discounts of up to 15 per cent on the benchmark interest rate for loans to first-time homebuyers.
Lam said developers were waiting to see how the market shaped up for the long Labour Day holiday weekend on May 1. If sales did not rebound then, they would start cutting prices aggressively.
The increase in mainland real estate investment in the first quarter from the same period last year