Guangzhou's property prices plunged 9.9 percent in November from the previous month, the first significant fall in several years.
The average cost of a new residential property in Guangzhou was 10,433 yuan per sqm in November, 1,141 yuan lower than the October price, according to a report given to the government inspection team yesterday.
"We haven't seen falling prices in the past couple of years - the property market's been red-hot and prices have been going up," said Xie Xiaodan, director of the Guangzhou land and housing administration.
The city's average residential apartment price hit a record high of 11,574 yuan per sqm in October, an 81.3 percent increase from the previous year, according to official statistics.
The average residential apartment price was 6,315 yuan per sqm in 2006, up 24.6 percent from 2005.
Many factors knocked down prices in November, including an increased supply of new housing and lower demand due to soaring prices, Xie said.
Residential property projects on the market have outnumbered sales since September, Xie said.
There was a total of 790,000sqm of residential apartments for sale in November, 38.6 percent more than the 578, 600 sqm sold that month.
Residential apartments sold in the city between January and October totaled 7.01 million sqm, a drop of 8.2 percent from a year ago.
The figure for October was 577,400 sqm, down 17.9 percent from 2006.
"With more residential apartments available and sales dwindling, speculative demand will be constrained and more potential buyers will be waiting to see what happens," he said. "Housing prices in Guangzhou will calm down."
Wang Tao, a project manager at Centaline (Guangdong) Property Agency Ltd, agreed. Wang said local property developers were less enthusiastic about bidding for more land to develop residential properties.
At Guangzhou's last land sale for the year earlier this month, prices for the 10 parcels of land ranged from 1,482 yuan per sqm to 4,241 yuan per sqm - much cheaper than land auctioned off three months ago in similar locations.
(China Daily December 20, 2007)