Mainland home sales started the year on a painfully slow note in most major cities, dropping nearly 70 per cent in the first week from the same period last year as buyers deferred purchases in expectation of a further fall in prices.
Among the eight cities monitored by Centaline, Shenzhen was the only one that saw a year-on-year increase in sales. It reported a 27 per cent rise for new home sales for the week of January 2-8.
Shanghai and Qingdao were the worst performers, with sales down 68 per cent and 67 per cent respectively in the first week, while Beijing dropped 35 per cent and Guangzhou 37 per cent. Government measures to deter speculation are believed to be behind the lacklustre start.
'With most cities stating clearly that the restrictions on the number of purchases will extend into this year, home seekers believe the move will continue to curb demand and will accelerate price falls. So, transaction volumes are bound to decline,' said Zhang Dawei, head of research at Centaline's Beijing office.
He said the era of developers earning fat profits had gone and they had to offer discounts to compete. 'A widespread price cut will become an obvious trend this year,' he said.
Hu Jinghai, vice-president of the mainland property website 5i5j, believes the residential property market will improve in anticipation of Beijing gradually relaxing restrictions in the second half of the year.
