A number of housing brokerage offices have closed in in Haikou, Hainan province, as a result of declining transactions. Home prices in China declined further in February as the government continued to curb the property market.[China Daily]
Home prices in China fell for a sixth month in February as the government maintained its curbs on the property sector, according to figures from the country's biggest real estate website portal on Thursday.
The China Real Estate Index System, affiliated with China's largest online real estate company Soufun Holdings Ltd, said property prices fell 0.3 percent last month from January, marking the biggest decline since September.
Prices dropped in 72 of the 100 cities tracked by the company, compared with 60 in January. Meanwhile, the average price stood at 8,767 yuan ($1,390) per square meter, down from 8,793 yuan per sq m in January, according to CREIS.
"The size of the fall is expected to be bigger in the coming months and more property developers will be offering discounts," said the CREIS report.
Meanwhile, there will be further price declines during the first half, and the market might bottom out toward the middle of the year, according to Liu Chunyan, general manager of Beijing WorldUnion Properties Consultancy Co Ltd.
"We estimate that home prices could drop 20 to 30 percent on average this year and that the declines will expand throughout the country, including to the third- and fourth-tier cities that were less affected last year," Liu said.
Despite the price fall, transactions in Beijing and Shanghai rebounded in February. However, developers are not optimistic about the rebound.
"As property sales pick up, the price is also likely to increase and that may trigger more tightening policies," said Qin Lihong, executive director of the real estate company Longfor Group.
"The window of opportunity for property developers will not last long," Qin added.
As the market correction deepens, some property developers plan to change their business portfolios to adapt to the changes.
Poly (Beijing) Real Estate Development Co Ltd, for instance, will increase its land bank and strengthen its investment in commercial properties, said Liu Xiang, its general manager.
"We are actively seeking appropriate opportunities to boost our land bank because the price of land is comparatively low now," said Liu. "Meanwhile, we plan to increase our commercial properties to 30 percent of our overall business portfolio in the next three to five years."
Currently, Poly's commercial properties account for less than 10 percent of its holdings.
Liu also said the recent increase in transactions in Beijing and Shanghai is a short-term phenomenon.
"Such a rebound is not sustainable because the government's real estate policies remain tight," he said.