‘Golden September’ loses its sheen as home hunters wait for mainland market to cool
Yvonne Liu and Chloe Lai in Guangzhou 30 September 2009
Sharply higher prices have kept prospective homebuyers away from the mainland property market this month, traditionally a peak period for property sales in the country.
Data monitored by the Royal Bank of Scotland Group shows that in 20 key cities on the mainland, completed property deals fell 14.5 per cent in the first three weeks of this month from the same period last month.
The sharp decline came despite the showcasing of properties in the annual Beijing Fall Home Show held early this month.
“Prices are too high. I’m not going to buy any property now,” said Wang, a prospective buyer, who operates a clothing store in Guangzhou. He was commenting after a visit to a new residential project in that city on Friday.
Another visitor to the launch, Li, an employee at a bank, said she was “just looking”.
“I came here just to get an idea about prices. I am not going to buy. It is too expensive now. Who knows what the price will be a year from now? I will wait for prices to drop,” she said.
But postponing a decision to buy might not be the best thing to do, a Guangzhou property agent named Mai said.
“It is true that prices have gone up a lot since early this year and, as a result, buyers have become more prudent over the past two months. But sellers are not cutting prices. I usually tell my clients it is still a good time to buy, because the market will be buoyant before the Asian Games,” he said.
In Beijing, agents and developers are also coping with the air of caution pervading the market.
David Ng Ka-chun, the head of regional property research at RBS, said transaction volumes at the capital’s home show this month were 32 per cent less than the sales achieved during the Spring Home Show in April.
“It is clear one of the factors is buyers were turned off by the high property prices,” said Ng.
September sales had traditionally provided a big lift to the market, and developers held back on their launches to capitalise on the seasonal surge, said Dickson Wong Hung, a deputy general manager at Centaline (China).
This year, the autumn boost has failed to materialise.
“September and October are referred to as ‘Golden September, Silver October’ because they are traditionally the peak months for property sales. But this month, transactions in Beijing’s secondary market were down 15 per cent to about 12,500 from about 15,000 deals in August,” Wong said.
“The reason is that property prices have gone up rapidly since March. And they are still rising in September. Also, the government has changed its approach to property policy recently and is resuming measures to cool demand.
“This has made home hunters hesitate and postpone their entry into the market.”
Data from property website Soufun shows prices of units sold at the home show this month were on average 21 per cent higher than those fetched in the April show.
Prospective buyer Andrew Kao, a Taiwan businessman, is waiting in the wings.
“I know prices have gone up a lot, and my mainland friends have warned me not to buy now,” he said. “I don’t think there is too much room for further rises, because the public’s income levels can’t support existing prices. So, if prices continue to rise, it would be the result of speculation.
“But I need a place to live in, and I think it is better to buy a property rather than rent one.”
Given such underlying demand and caution, Wong said property sales would stay at current levels next month, helped by the launch of several projects.
Among the launches will be Longfor Group’s Summer Palace Splendor, a luxury residential project near the Summer Palace in Beijing that provides 91 apartments sized from 1,000 square metres. Guangzhou R&F Properties will also launch its R&F Danish Town in the city.
While a surge in prices had slowed sales in most markets in China, developers were in a stronger position to resist rushing into price discounts to boost sales, said Alan Chiang Sheung-lai, the head of residential property at DTZ in China. A shortage of supply in the pipeline would also encourage them to stick with their present pricing strategy, he said.
Chiang expects turnover to remain at low levels until the second quarter of next year but prices to remain firm.
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Surging prices keep buyers away
‘Golden September’ loses its sheen as home hunters wait for mainland market to cool
Yvonne Liu and Chloe Lai in Guangzhou
30 September 2009
Sharply higher prices have kept prospective homebuyers away from the mainland property market this month, traditionally a peak period for property sales in the country.
Data monitored by the Royal Bank of Scotland Group shows that in 20 key cities on the mainland, completed property deals fell 14.5 per cent in the first three weeks of this month from the same period last month.
The sharp decline came despite the showcasing of properties in the annual Beijing Fall Home Show held early this month.
“Prices are too high. I’m not going to buy any property now,” said Wang, a prospective buyer, who operates a clothing store in Guangzhou. He was commenting after a visit to a new residential project in that city on Friday.
Another visitor to the launch, Li, an employee at a bank, said she was “just looking”.
“I came here just to get an idea about prices. I am not going to buy. It is too expensive now. Who knows what the price will be a year from now? I will wait for prices to drop,” she said.
But postponing a decision to buy might not be the best thing to do, a Guangzhou property agent named Mai said.
“It is true that prices have gone up a lot since early this year and, as a result, buyers have become more prudent over the past two months. But sellers are not cutting prices. I usually tell my clients it is still a good time to buy, because the market will be buoyant before the Asian Games,” he said.
In Beijing, agents and developers are also coping with the air of caution pervading the market.
David Ng Ka-chun, the head of regional property research at RBS, said transaction volumes at the capital’s home show this month were 32 per cent less than the sales achieved during the Spring Home Show in April.
“It is clear one of the factors is buyers were turned off by the high property prices,” said Ng.
September sales had traditionally provided a big lift to the market, and developers held back on their launches to capitalise on the seasonal surge, said Dickson Wong Hung, a deputy general manager at Centaline (China).
This year, the autumn boost has failed to materialise.
“September and October are referred to as ‘Golden September, Silver October’ because they are traditionally the peak months for property sales. But this month, transactions in Beijing’s secondary market were down 15 per cent to about 12,500 from about 15,000 deals in August,” Wong said.
“The reason is that property prices have gone up rapidly since March. And they are still rising in September. Also, the government has changed its approach to property policy recently and is resuming measures to cool demand.
“This has made home hunters hesitate and postpone their entry into the market.”
Data from property website Soufun shows prices of units sold at the home show this month were on average 21 per cent higher than those fetched in the April show.
Prospective buyer Andrew Kao, a Taiwan businessman, is waiting in the wings.
“I know prices have gone up a lot, and my mainland friends have warned me not to buy now,” he said. “I don’t think there is too much room for further rises, because the public’s income levels can’t support existing prices. So, if prices continue to rise, it would be the result of speculation.
“But I need a place to live in, and I think it is better to buy a property rather than rent one.”
Given such underlying demand and caution, Wong said property sales would stay at current levels next month, helped by the launch of several projects.
Among the launches will be Longfor Group’s Summer Palace Splendor, a luxury residential project near the Summer Palace in Beijing that provides 91 apartments sized from 1,000 square metres. Guangzhou R&F Properties will also launch its R&F Danish Town in the city.
While a surge in prices had slowed sales in most markets in China, developers were in a stronger position to resist rushing into price discounts to boost sales, said Alan Chiang Sheung-lai, the head of residential property at DTZ in China. A shortage of supply in the pipeline would also encourage them to stick with their present pricing strategy, he said.
Chiang expects turnover to remain at low levels until the second quarter of next year but prices to remain firm.
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