Analysts split on outlook as new home sales in China drop

The value of new home sales on the mainland fell 5.5 per cent month on month in October after a 39.7 per cent jump in September, an analysis of official data released yesterday shows, contradicting private data that pointed to a recovery.

But the year-on-year decline eased to 3.1 per cent from September's fall of 10.3 per cent, the National Bureau of Statistics said.

Analysts are split on the outlook for the rest of the year and next year. Global ratings agency Moody's Investors Service, which on Wednesday maintained its negative outlook for the industry, projected a fall of up to 5 per cent in nationwide sales and a modest drop in prices next year.

The bureau said total property sales revenue, including non-residential sectors, fell 7.9 per cent year on year in the first 10 months of the year, easing from a drop of 8.9 per cent in the first three quarters.

"We believe sales recovery will get stronger in late 2014 and early 2015," said Edison Bian, head of China property research at UOB Kay Hian.

He was more optimistic than Moody's, forecasting flat sales for all of 2015 on rising new supply and cheaper mortgage loans.

Data from E-House (China) Holdings showed sales rose in all but four of the cities it surveyed last month compared with September.