High turnover hints property rebound

The turnover of China's property market has witnessed a new high in May, reported www.chinanews.com on Wednesday.

In early to mid May, the turnover of commercial residential buildings in 54 cities, including Beijing, Shanghai, Shenzhen and Guangzhou set a new high this year. The total volume reached 141,362 sets, up 22.8 percent compared with the same period of 115,111 sets in April, the report said, citing statistics provided by the Marketing Department of Beijing Zhongyuan Ltd.

The figure is not only significantly higher than the same period last year, but also soared to the highest value after implementation of property-purchasing limitations.

Zhang Dawei, director of the Marketing Department of Beijing Zhongyuan Ltd, stated that the reason cities' housing prices have maintained the same or risen is mainly because after more than a year of macroeconomic control, some rigid demands have begun to enter the market. At the same time, with the central bank lowering the deposit reserve ratio again this year, bank credit has moderated gradually. Credit lines and interest rate concessions were raised for first-time house buyers in major cities in April.

Zhang explained that, although the knock down contract areas of new houses in 30 major cities dropped to 13.58 million square meters in April, down 14 percent from last month, the figure is still the second highest after macroeconomic control in 2011, and the year on year growth hits 25 percent.

By deducting five days of holiday in April, the average monthly trading value was roughly equal to March, Zhang added. The figure shows a market boom for two consecutive months and establishes a recovery trend for early to mid May.

He also claimed that, currently, the redline control policies such as property-purchasing limitations, are still enforced in the market, developers of the inventory are still very large, the potential supply is still at a high level, and the property market does not have a foundation for a sharp rebound.