Wave of China property tightening hits home sales during holiday week

Hopefluent group

12/10/2016 02:28

(Repeats item first carried late on Tuesday) 
    * National Day holidays popular time for Chinese to buy 
property 
    * Realtors say prices and area sold fell in many big cities 
    * Follows sharp run up in prices all year in major cities 
    * Prices rises have raised official concerns in Beijing 
    * Several cities have introduced measures to restrict 
purchases 
 
    By Clare Jim 
    HONG KONG, Oct 11 (Reuters) - A wave of restrictions imposed 
on housing markets in major Chinese cities last week have 
unnerved some buyers and developers, cutting the area of new 
homes sold in places such as Beijing and Shenzhen by more than 
half. 
    More than 20 cities have imposed measures, including higher 
mortgage downpayments, to cool hot property markets that have 
raised official alarm in Beijing and fresh concerns about 
China's ballooning debt.  urn:newsml:reuters.com:*:nL3N1CE07Z 
    Last week was a public holiday to mark National Day, 
traditionally a high season for property sales. Property agents 
said prices of new homes sold in the southern city of Shenzhen 
and in Beijing dropped 20 percent last week to entice buyers, 
compared with the previous week. 
    "The new tightening measures are quite stringent," said Alan 
Cheng, general manager of realtor Centaline Shenzhen. "It's a 
blow to confidence and people are worried that prices will drop, 
so they are observing from the sidelines now." 
    The latest restrictions varied from city to city, but 
included higher mortgage downpayments for second and third-time 
home buyers, in a bid to stem the flow of cash into the red-hot 
property market.  urn:newsml:reuters.com:*:nL3N1CC0SQ 
    China's home prices rose 9.2 percent in August from a year 
earlier, official data shows. But in Shenzhen, they increased 
almost 37 percent, in Beijing more than 23 percent and in 
Shanghai topped 30 percent. Such hefty price rises have been 
common all year in these so-called Tier 1 cities. 
    The rally has prompted a frenzy among some buyers. In some 
cases, couples divorced to find a way around buying 
restrictions. 
    Despite signs of caution among buyers and developers last 
week, agents said it was too early to tell if the tightening 
measures would reverse the rally across many of China's major 
cities. Credit remains loose and demand was still high, they 
said. 
    Instead, buyers and developers were probably pausing to see 
the impact of the flurry of tightening measures, which occurred 
as central bank Governor Zhou Xiaochuan warned that the 
government was "paying close attention" to rising property 
prices in some cities, they said. 
    Earlier on Tuesday, Premier Li Keqiang said the government 
will ensure a stable development of the property market. 
 urn:newsml:reuters.com:*:nB9N1C2008 
     
    DECLINES 
    Local governments, such as Shenzhen, also rejected 
permission for some new launches if they considered offer prices 
were too high, these agents said. 
    Beijing and Wuxi, a city near Shanghai, had no new launches 
last week, a survey of 10 major cities by property researcher 
CREIS showed. But the area of residential space sold, based on 
developments launched previously, plunged 86 percent and 72 
percent, respectively, compared to the previous week. 
    CREIS said cities including Shanghai, Hangzhou and Wuhan, 
launched new developments but the area put on the market 
declined more than 50 percent and the area sold dropped 35 
percent to 60 percent. 
    The eastern city of Qingdao was an exception, the CREIS 
survey showed. The amount of residential space sold climbed 23 
percent from the previous week. 
    In Shenzhen, a development called "Mountain & Sea" went to 
the market on Sunday and was the first new launch since the 
tightening measures last week. 
    According to data provided by realtor Hopefluent  0733.HK  
Real Properties (China), 62 percent of the 548 flats had been 
sold. But Andy Lin, Hopefluent's market research director, 
suggested that was not necessarily good news for the 
development. 
    "I had estimated a selling price of 63,000 yuan before. It's 
now dropped by around 20 percent," Lin said. "At this price, a 
62 percent selling rate is very low." 
    He said Shenzhen had gained the most attention nationwide 
for its stringent measures to cool the market. 
    "So projects can't be selling too well. It's a political 
task for the Shenzhen government to suppress home prices," Lin 
said. 
 
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GRAPHIC: China's property prices compared     http://tmsnrt.rs/2d2rSnQ 
Fever spreads: China's property speculators descend on inland 
cities     urn:newsml:reuters.com:*:nL3N1C605Q 
TABLE: China's property price changes in August     urn:newsml:reuters.com:*:nENNG9D0SH 
Evergrande's debt burden just keeps on growing, squeezing 
shareholders     urn:newsml:reuters.com:*:nL3N1AX38F 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Reporting by Clare Jim; Editing by Neil Fullick) 
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters 
Messaging: clare.jim.thomsonreuters.com@reuters.net)) 
 
Keywords: CHINA PROPERTY/