Rebound in sales of flats in Beijing after party names new leaders

The release of pent-up demand after three months of slow sales boosted home-buying in Beijing this month.

"Sales of new and second-hand homes in the capital city rose by up to 20 per cent in the first three weeks of this month, compared with the same period last month," said Dickson Wong Hung, chief executive (northern and southwest China) of Hong Kong estate agency Centaline.

Wong expected that once all data was available, total transactions of second-hand homes would reach about 14,000 for November compared with 12,000 deals for the previous month. But that would still be below the 16,000 and 17,000 deals recorded in March and April, the peak so far for the year.

Beijing Huaye Real Estate released more than 200 flats at its Oriental Rose project, in the Tongzhou suburb of Beijing, on November 17. More than 100 were sold in the first day and all were sold in a week, according to mainland media reports.

Another project, developed by Gemdale Group, attracted 1,600 prospective buyers to register for buying flats. The response encouraged the developer to increase the first batch of flats released from 288 to 484 flats.

At Hopson Development Holdings' Binjiangdijing project, 280 two-bedroom flats were released for sale at the end of October, leaving only 30 flats remaining to be sold. The average price of the flats has risen to 17,000 yuan (HK$21,150) per square metre from 15,000 per square metre when the project was launched in September.

Alan Chiang Sheung-lai, head of residential property on the mainland for consultancy DTZ, said the rebound in sales was due to a release of pent-up demand.

"Home seekers adopted a wait-and-see attitude on buying flats for a few months before the change in the top leadership of the country in November. Now the outlook is clear and they believe the new leaders will not release new property measures in the short run."

Also helping to boost sales, he said, was a rush of new releases by developers. "Sales could be booked for this year if preliminary sale and purchase agreement are signed before the end of the year," Chiang said.

Wong said the rebound this month was different from the strong sales periods in March and the second quarter.

"Previously prices continued to fall, despite a rebound in sales. This time we saw property prices remaining stable. With some of the new releases, developers even raised their asking prices slightly without affecting a positive market," he said.

Most of the new projects on the market involve small flats, says DTZ.

"Current demand for homes is mainly from end-users and buyers upgrading their living environment. About 80 per cent of the buyers are end-users," Wong said.

Despite the rebound in sales transactions, Chiang expects that prices will stay flat in the short term.