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Homes Sales Rebound as Mood Picks Up
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March 2009 |
A countrywide surge in sales since the
beginning of the year has injected a sense
of optimism that the worst is over for the
mainland property market and a sustainable
rebound is under way.
The market improvement was proven by
inventory depletion as well as price
stability in some cities, analysts said.
While optimists said home buyers had
regained confidence after the government's
stimulus package including falling mortgage
loans and lower transaction tax expenses,
some said the rebound was spurred by pent-up
demand and bargain prices.
They were also concerned that prices were
not following deal volumes higher. "It
is definitely a sustainable volume
recovery," said Lee Wee-liat, a property
analyst at investment brokerage Nomura
International HK. Mr Lee based his
call of a rise in demand since February -
following a short-term rebound by the end of
last year - on data compiled by Nomura
showing a widespread surge in deal volumes
nationwide last week.
The number of property deals was up on the
previous week's sales by 24 per cent in
Beijing and Tianjin, and 71 per cent and 19
per cent higher, respectively, in Qingdao
and Dalian, the data found. In Shanghai, 19
per cent more properties changed hands.
Guangzhou and Shenzhen recorded slight
volume declines on the week, Mr Lee said,
but remained at around the highest levels
seen in the two cities for two years.
The increasing pace of sales was beginning
to reduce unsold housing inventory, he said.
The rising trend is also supported by
research from consultancy DTZ. Total sales
volume in first-tier cities in January and
February was up 34.5 per cent year on year
with Beijing recording an increase of 27.5
per cent, Shenzhen 169 per cent, and
Guangzhou 61.1 per cent, DTZ said.
Beijing's inventory was down 8 per cent from
last year's peak level, while Shanghai's
unsold housing stock was down 8 per cent and
Hangzhou's inventory was 16 per cent lower,
Mr Lee said. Some analysts, however,
said the sluggish response to the increased
deal volumes shown by prices would affect
the calling of a definite end to the
downturn, particularly in Beijing.
Those who urged caution said the jump in
deal volumes could also have been caused by
the release of long pent-up demand and
bargain prices. However, Mr Lee is
convinced the turning point has been
reached. "Many people had been worried
that the steady increase in deal volumes
could run out of steam as we entered March
and April because by then sales campaigns
would have exhausted pent-up demand.
"There was no sign of this last week," he
said.
Prices have also shown signs of stabilising
in cities such as Guangzhou, Shenzhen,
Dalian and Ningbo. For example,
developer Everbright Real Estate sold 250
units at Guangzhou Everbright Garden in the
first three hours of public sale on Sunday,
despite an increase of about 8 per cent on
prices offered in a sale a month ago.
"The short-term rebound towards the end of
last year was boosted by central government
and local authority stimulus measures. This
time it is different," said David Ng, the
head of regional property research at ABN
Amro Bank.
Data released by property firm CB Richard
Ellis in Shanghai show prices of luxury
residential properties fell during the first
quarter in all key mainland cities except
Nanjing, where they were up just 1.7 per
cent, and Xian, which saw prices gain 0.7
per cent.
The biggest drop was in Shenzhen, where
prices of luxury apartments were down 6.4
per cent on the previous quarter.
Source: South
China Morning Post |
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