Property sales in major mainland cities are expected to remain sluggish during the 'golden week' national holiday that starts this weekend.
Traditionally a peak period for sales, the seven-day holiday from Saturday is not expected to see the usual number of buyers, say agents, despite the promise of developer discounts to encourage sales.
'There will be no big increase in sales during the holiday. Demand will be more or less the same as it is right now,' said Andy Lee Yiu-chi, head of the Shenzhen branch of real estate agency Centaline Property.
Lacklustre interest from buyers might turn positive, however, if developers responded by releasing new projects at even steeper discounts to drum up sales, said Lee. Some new projects are on sale at prices about 10 per cent below secondary market prices in the same areas.
But under the weight of government moves to curb demand and price growth in the property sector, sales have slumped sharply in Shenzhen, with just 1.4 million square metres of new flats sold in the first half of the year, compared with four million square metres sold for the whole of last year, said Lee.
'The data shows that sales performance is far from satisfactory as the number of people eligible to buy homes has been sharply reduced under the government's cooling measures,' he said.
In January, Beijing announced eight austerity measures to cool the property boom. At least 35 cities moved to restrict registered residents from buying more than two flats. The same restriction will apply to smaller cities.
In Shanghai, sales volumes look set to tumble to a three-year low this month, according to agents.
'Sales are turning out to be worst than market expectations. The number of transactions handled by Centaline in Shanghai this month is down 15 per cent on August deals, and August was down 20 per cent on July sales,' said Clement Luk, Centaline Property Agency's chief executive for the mainland's east and northeast regions.
Agents estimate sales in Shanghai this month might fall to just 600,000 square metres, which would be the lowest total for the month since September 2008 when 490,000 square metres was sold.
According to data compiled by mainland property information website, China Real Estate Information Corp, 412,000 square metres of residential space in Shanghai was sold between September 1 and September 20.
In Shanghai, 208 new projects have been released for sale since June, according to data from property agency 21st Century Property. Average sales prices in 23 releases were 5 per cent to 10 per cent lower than secondary transaction prices while prices in 68 of the projects were down by less than 5 per cent.
In Beijing, sales were more than 50 per cent down on the total for September last year, said Kenneth Pak Kei-yuen, a senior general manager in the Beijing office of Midland Realty.
As at September 25, 4,039 new flats were sold, against 8,562 units for the whole month last year. The month-on-month sales volume, however, was almost unchanged from August.
'Potential buyers will remain cautious about the market outlook in anticipation that the central government will be unlikely to relax its cooling measures in the short term,' said Pak.