Property sales drop 34% as government curbs start to bite
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Property sales across 54 cities in China fell about 34 percent in the past two weeks compared to the prior two weeks, 21st Century Business Herald reported on October 17. However, with government efforts to deflate speculation in the market still taking effect, transactions so far in October reached 130,944 compared to 137,483 in the same period in the prior month, according to the report.
The success of the government curbs is showing a mixed picture in different cities based on primary or secondary property market sales. In Shenzhen, the number of daily transactions in the secondary market dropped around half after Golden Week, according to Xinhua News Agency on October 17, citing figures by research director Xu Feng at Shenzhen Real Estate Broker Trade Association. Transactions used to number around 300 a day but that’s fallen to a little more than 100, Xinhua said, citing Xu.
Property sales in neighboring Guangzhou, however, show no signs of slowing, Guangzhou Caixin reports. Primary property transactions in the city from October 10 to 16 surged 43.3 percent to a record 4,610 for this year, according to property agent data. The average transaction price was RMB 19,575 per square meter, a 12.7 percent increase from the previous week.
Mortgages accounted for 40% of new loans in September
Mortgages accounted for 40% of new loans in September with the amount of the housing loans estimated at 440 to 480 billion renminbi, Caixin reported. The central bank wants lenders to control the rate of new mortgages within a reasonable range, the financial media website said without giving further details.
In the first half of this year, mortgage lending accounted for 30% of total new loans, according to People’s Bank of China data compiled by Asia Times.
Government plans investment to aid economic growth
The government has announced several policies in October to ensure economic growth, yicai.com reports.
- Railway projects approved by the National Reform and Development Commission so far in October amounted to RMB 200 billion.
- The third round of 516 Public-Private Partnership programs amount to RMB 1,170 billion, exceeding the scale of the previous two rounds.
- Ministry of Housing and Urban-Rural Development identified 1,000 towns for investment in manufacturing, education, tourism and others.
Political will needed for success of economic reforms, says Henry M. Paulson
China’s leaders will need to demonstrate political will to make the country’s economic reform plans a success, said former US treasury secretary Henry Paulson in an interview with Caixin in Hong Kong yesterday. Production overcapacity and inefficiency of state-owned enterprise are problems that need to be tackled in shifting the economy to focus more on services and consumption, with less reliance on government investment and infrastructure, he said in the report.