Residential property market slumps

Despite a number of housing exhibitions being held across the nation, about 70 percent of cities reported a decline in sales in the residential property market in the first week of May, according to a recent report.

Property exchanges in Chongqing, Shenzheng, Chengdu and Hangzhou reported a 30 percent week-on-week decrease, according to a report tracking the property market in 40 cities by China Index Academy, a real estate research institute and service provider.

As many as 1,922 residential apartments were sold between May 1 to May 6, with a combined space of 204,300 square meters. The weekly average amount in May 2011 was 248,600 square meters.

In Dongguan, south China's Guangdong province, only 707 apartments were sold, leaving 82,426 apartments available.

At Shanghai's housing exhibition, many visitors just showed up to inquire about prices and had little interest in buying a house at this stage because they expected further price deductions, said Wang Xiaoli, a property saleswoman in Zhabei district, Shanghai.

Most of the potential buyers were looking for apartments to live in rather than investment property.

The exception was Nanjing, where 1,299 apartments were sold, with a combined space of 133,300 square meters, representing more than 80 percent year-on-year growth.

“In Nanjing, developers are introducing various promotion schemes, and we find this is the right time to spend the cash,” said Liu Chun, a homebuyer in Nanjing.

A survey released by China Index Academy sampling real estate market performance in the first quarter of this year found that the average price of housing around the nation had reached the lowest since November 2011.

At the same time, developers acquired less land in the first quarter. The 10 developers the survey sampled reported a 77 percent year-on-year decrease in the first quarter this year.

Developers tend to slow the pace of construction, cut costs, acquire land with more caution, and turn to non-residential projects, according to the survey.

Though the housing property market has slumped in many cities around the nation, the commercial property market in China is regaining confidence, analysts said.

Controls over housing have pushed investors into commercial properties since the second quarter of 2010, and block tradings are reporting a quite positive performance, said Tsui Yik, director of valuation and investment services with E-commercial China, a provider of commercial real estate services.

Control policy over housing properties will not be loosened in a short time, said Tsui. On the other hand, block trading in the property market is still a seller's market, with increasing activity and transparency, and it is still a good time for investors to select quality projects for further investment.

As long as the locations are prestigious and the projects are well managed, commercial properties under construction will be significant draws for investors in 2012, according to a report released by E-commercial China.