The central government’s continued austerity measures targeting the property market are taking a toll on sales in the major cities, with Shanghai seeing average monthly sales of private homes from January to September falling to the lowest level in seven years.
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Sales in Shanghai plunge to new low
Peggy Sito
26 October 2011
The central government’s continued austerity measures targeting the property market are taking a toll on sales in the major cities, with Shanghai seeing average monthly sales of private homes from January to September falling to the lowest level in seven years.
Shanghai’s statistics bureau said 10.6 million square metres of residential property was sold in the first three quarters of the year, a decline of 15 per cent over the same period last year, Xinhua reported.
Average monthly home sales over the period fell to 1.2 million square metres, the lowest in the first three quarters since 2005. That average is down 16 per cent from the same period last year.
Although demand is falling, supply is on the rise. Home starts increased 24 per cent and new completions jumped 49 per cent in the January-September period compared with the first three quarters last year.
Hit by the credit tightened, loans to the real estate sector in the period fell 15 per cent from last year to 59 billion yuan (HK$72 billion), while mortgage loans to individuals dropped 17 per cent to 15 billion yuan.
Developers of Shanghai properties are increasingly being required to use more of their own funds to finance projects as banks squeeze lending.
Latest data from the Shanghai Municipal Statistics Bureau show that developers put in 89 billion yuan in the first three quarters, a 16 per cent increase from the same period last year.
In Beijing, 6.4 million square metres of residential property was sold in the first nine months of the year, a decline of 12per cent over the same period last year.
However, sales of government-subsidised housing increased by 120 per cent to 1.97 million square metres.
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