China home sales set to fall after latest tightening measures
Activity is likely to take a breather after a busy March and further tightening
Property sales on the mainland are expected to drop this month, given high activity in March and further tightening measures, according to property analysts.
The next catalyst for the housing market should come after the first week of May, according to Nomura - the three-day holiday starting on April 29.
New-home sales in first-tier and second-tier cities were up 8 per cent and 13 per cent week on week, respectively, according to Nomura.
Jefferies Equity Research said weekly transactions in 31 key cities grew 4 per cent week on week.
Among them, 19 cities saw volume growth while 12 cities experienced declines, it quoted data provider China Real Estate Index System as saying.
"We expect sales in April are likely to take a short-lived breather given the shortage of new suppliy and rise in developers' asking prices," Nomura said.
"Against this backdrop, the sector will probably be range-bound in April; the next catalyst should come after the first week of May," it said.
Commenting on five measures to rein in the property market announced by the State Council in March, Nomura said cities, especially the lower-tier ones, had not implemented them with as much toughness as expected, largely owing to these cities' unexpected economic weakness.
Property consultant CBRE says the tightening signal sent out during this round of intervention, such as the 20 per cent capital gains tax levied on secondary-home sales and more limits on mortgages to buy second homes, will have an impact in due course. Growth in home prices is expected to slow and transaction volumes to fall.