MNI: No Rebound Expected For China Property Sales In December

     BEIJING (MNI) - China's housing sales are not expected to rebound during

the rest of the year as policy controls over the property sector are not likely

to be loosened, E-house Real Estate Research Institute said in a report Friday.

     The Shanghai-based consultancy reported that housing sales in 50 major

Chinese cities rose 3% to 23.38 million square meters on a monthly basis in

November, the third consecutive monthly rise. 

     On an annualized basis, though, sales in the 50 cities were down 13% in

November, the ninth consecutive year-on-year drop, E-house said.

     "The year-on-year data shows the property market is not as hot as the same

period last year," Lai Qin, an E-house analyst, said in the report.

     Lai noted that the property market had cooled across all three city tiers.

     Year-on-year sales declined in all Tier-1 cities. They were down 22% in

Beijing, 39% in Shanghai, 29% in Guangzhou and 11% in Shenzhen. On a

month-on-month basis, though, sales in November rose 44%, 8% and 26% in Beijing,

Shanghai and Guangzhou, respectively, while they dropped 9% in Shenzhen.

     Tier-2 cities witnessed the ninth straight monthly y/y drop of 13% to 12.77

million square meters, while the m/m growth was 6%.

     Sales dropped both on a yearly and monthly basis in Tier-3 cities, down 9%

yearly and 5% m/m to 8.61 million square meters.

     "The overheating period of the property market has already ended in Tier-3

cities," Lai said.

     He attributed the cooling in Tier-3 cities to tightened policies by local

governments under the mandate of the central government. He also noted the

slight m/m growth was due to the government's recent measures to check property

companies' hoarding of property units and thus increase supply and transactions

in the market. 

     The Chinese government initiated a sweeping campaign to control surging

housing prices at the end of last year, with even more curbs rolled out in

March. New regulations include forbidding the transformation of commercial

property into residential units, extending the waiting time a property can be

placed onto the secondary market for sale, and limiting the highest listing

price for a new property project.

     Local governments should continue to stick to the stance set by the 19th

Communist Party Congress in October that "houses are for living in, not for

speculating on," and the current property controls are not expected to be

loosened, Lai said. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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