China home buyers wait for better deals as developers see big drop in contracted sales in July amid economic slowdown
- China’s top 100 developers see contracted sales fall dramatically in July – but will prices fall as well?
- ‘People are worried about their jobs,’ and reluctant to buy, one analyst said
Potential homebuyers in China are waiting on the sidelines, hoping for better deals.
New data suggests a break in prices might be coming.
In July, China’s top 10 builders recorded a month-on-month fall of 80 billion yuan (US$11.4 billion) in total contracted sales, due to a combination of a slowdown in the economy and government policies to clamp down on their debt.
The biggest plunge among them was 58 per cent. The top 100 developers saw an average fall of 29 per cent.
The question is whether prices will begin to fall as well, as developers feel pressured sell lower to sell more. In the most recent government survey of 70 major Chinese cities, homes prices fell in only three of them.
“Amid a gloomy economy outlook, people are worried about their jobs, and are reluctant to set aside such a large amount of money and purchase a home. A further decline (of sales) in the coming months will be seen,” said Yan Yuejin, research director at Shanghai-based property services company E-House China R&D Institute.