Property sales value ebbs amid negative outlook

Potential homebuyers look at models of residential property at a developer's showroom in Nanjing, Jiangsu province. CHINA DAILY

The value of home sales fell 5 percent year-on-year to 598.5 billion yuan ($97.5 billion) in the first two months as concern grew about the outlook for the residential property sector, industry experts said.

The figure was a marked contrast with the same period last year, when sales almost doubled, according to figures released on Thursday by the National Bureau of Statistics.

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Analysts noted that last year's strong performance was partly the result of a low base in the same period of 2012.

The analysts said this year's decline reflected increasing uncertainty in the market, which has been fueled by negative comments from major real estate players.

Wang Shi, founder of the nation's largest residential developer, China Vanke Co Ltd, posted a blunt warning on his micro blog: "The situation in China's property market is very bad."

Another property tycoon—Ren Zhiqiang, chairman of Huayuan Property Co Ltd—forecast single-digit home price gains in 2014. Ren warned other developers not to be positive about the property market this year.

Major financial institutions are scaling back their forecasts for China's real estate market.

For example, UBS AG said the pace of home price increases could slow from about 10 percent in 2013 to between 5 and 10 percent in 2014, as supply in first-tier cities improves and monetary conditions tighten.

Shanghai E-house China R&D Institute said that as of the end of February, inventories of new apartments stood at 82.33 million square meters in the top 20 cities, up 12.2 percent year-on-year.

Many of the transactions last year reflected inelastic demand or investment.

"In the coming month, there will be more new residential projects available for sale," said Yan Yuejin, a researcher with E-house.

But Hui Jianqiang, research director of Beijing Zhongfangyanxie Technology Service Ltd, said the actual situation in the overall property market "isn't that bad" when viewed on a year-on-year basis.

In the first two months, 104.66 million sq m of properties of all kinds traded for 709 billion yuan nationwide. Last year, the comparable figures were 104.71 million sq m and 736.1 billion yuan, according to the NBS.

"The absolute numbers aren't that different," said Hui.

Premier Li Keqiang told a news conference in Beijing on Thursday that the government will curb demand for housing among investors and will "regulate the housing market differently in different cities".