Property sales drop in January as market continues to cool

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Chinese property sales declined in January, while the Spring Festival period saw a particularly sharp drop in turnover, according to two reports covering cities nationwide.

Xinhua reported Monday that the first month of the year saw a 31-percent month-on-month drop in property sales, based on the amount of floor space sold in 40 cities.

Citing data from a survey of property sales in 40 cities by E-house China R&D Institute, Xinhua said that year-on-year, January saw a 14-percent decline in overall sales volume, with the third- and fourth-tier cities falling by 21 percent.

A separate study by the China Index Academy found that during this year's Spring Festival period, property sales fell by more than 90 percent compared to last year's holiday season.

The study showed drops of more than 90 percent in cities from all tiers over the week-long period February 4-10, with many buyers telling the survey that they were going to “wait and see” any changes in the market before buying property this year.

January and the Spring Festival period are typically quieter times of year for the property market, with China Daily saying Shanghai only saw 1,800 new properties put on the market in the first month of the year, compared to over 9,000 in December.

Many cities and provinces have implemented measures to cool down the overheated property market in recent years, including requiring higher down payments for apartments, particularly if the buyer is already a property owner.

According to Xinhua, the annual Central Economic Work Conference called for a long-term mechanism to maintain the sound development of the real estate market, under the principle that "housing is for living in, not speculation," which analysts said set the tone for China's property market regulation this year.

With slowing sales and falling demand, many property developers have been adjusting prices to try and attract more buyers. However, authorities in certain areas have displayed concern over price drops that are too dramatic.

In east China's Jiangsu Province, authorities in the city of Pizhou earlier this month spoke out against “malicious price cuts,” after a developer reduced prices by around 2,000 yuan (300 U.S. dollars) per square meter.

The city's Real Estate Chamber of Commerce said that certain properties had “disrupted the market order,” with behavior that had “seriously disrupted the order of the real estate market.” Developers were then told they were required to sell property “according to the prices on file.”

In November 2018, Chinese media reported that after prices fell by 6,000 yuan per square meter in the city of Hefei, Anhui Province, authorities again intervened to prevent the price drop.