Buyers, sellers in Beijing stay on sidelines
As the nation's leaders gather in Beijing this week for the annual parliamentary meeting, buyers and sellers of homes in the capital will hold their breath and read between the lines of official pronouncements for policy implications for the bubbly real estate market.
They have been hesitating in the past few weeks, driving down the number of transactions and stalling prices in the secondary market.
"The outlook will clear up in late March," said Kou Hailong, Beijing head at Century 21 China Real Estate.
Some sellers are planning to increase asking prices, as they expect rising land prices in the city to drive up the prices of both new and pre-occupied homes.
However, others may offer discounts to secure a deal as soon as possible, as they are worried the government could announce fresh tightening measures at any time.
"Everyone is looking from the sidelines now, waiting for policy indications from the meeting," said Jin Ruixin, a research director at Centaline Property Agency in Beijing.
"The extended time for approvals for mortgage loans and recent price cuts in some second-tier cities, including Hangzhou, are weighing down sentiment here," he said.
Data from the National Bureau of Statistics showed that home prices on the secondary market in Beijing fell 0.1 per cent in January from December, the first monthly decline since June 2012, although in year-on-year terms prices rose 18.4 per cent in January, easing from a peak 20.1 per cent annual increase in November.
The bureau is scheduled to announce price data for last month for the new-home and second-hand home markets in 70 major cities, including Beijing and Shanghai, on March 18.
However, private data points to continued gains, albeit at a slower pace, in the prices of pre-occupied homes in Beijing.
China Index Academy, the mainland's biggest real estate consultancy, said prices in the capital's main urban districts rose 0.9 per cent last month from January and 18.36 per cent year on year, to an average of 42,762 yuan (HK$54,000) per square metre. Its main rival, CRIC, a unit of real estate services firm E-House (China), said prices of pre-occupied homes in Beijing rose 1.23 per cent month on month and 16.24 per cent year on year.
In any case, the risk is on the downside. Data from Century 21 China Real Estate showed 1,931 pre-occupied homes were sold last week, down 30.6 per cent from the comparable week in January but up 38.1 per cent from a week earlier.
Also adversely affecting sales of pre-occupied homes will be the surging supply from the government-subsidised scheme for the purchase of homes for sel-use. Homes under the scheme will be priced 30 per cent lower than comparable ones in the same neighbourhood but come with restrictions on ownership and future sales. The first three such projects have already been launched, providing 7,347 homes.
"Lower prices at such projects have attracted some end-user buyers, making them hesitate between buying into the scheme and buying on the secondary market, thus delaying transactions," Kou said.