China home sales fall but developers gear up for busy September-October season to catch up
China's home sales fell last week as expected, but developers are gearing up for the traditionally busy September-October season with hopes it will help them reach their full-year targets.
Residential property floor space sold fell 20.3 per cent week on week in 29 cities tracked by the China Real Estate Index System (CREIS), the country's largest private property data provider. Only nine cities bucked the trend with increases.
Despite the poor showing, Nomura analyst Jeffrey Gao said property sales would end the third quarter better than the second quarter and possibly flat in the last quarter of this year.
"Banks will probably slow down mortgage lending towards the end of the year as annual [lending] quotas have been used up," he said, adding that this was conducive to leaving some room for growth next year.
Lenders in Shenzhen, and more recently in Shanghai, have already increased down payments and mortgage rates, after home prices surged beyond expectations and were deemed as risky at a time when Chinese banks are seeing rapid rises in non-performing loans.
Nationwide, policies will remain accommodative to the property sector as part of the central government's efforts to stabilise broad economic growth.
"Developers will push out more supply this week, to prepare for the traditional golden September and silver October season," CREIS said in a report.
Last week, 45 projects totalling 8,200 units were launched for sale in 10 major cities, with the average asking price 3.4 per cent higher than previous phases, or 3.5 per cent more expensive than neighbouring projects.
Data from another property consultancy E&H Corp showed the top 10 developers on its list suffered a 40 per cent slump in combined sales revenue in July from June. Only six developers, including Evergrande Real Estate Group, reached more than 60 per cent of their full-year targets by the end of last month.