Share
SHANGHAI: China homebuyers have recovered their confidence in the market outlook after major cites — except Beijing — all set positive price growth targets for new residential sales.
More than 70 cities have released their "control targets" for the year, ranging from projected increases of 8% to 13%. The targets were released before the Apr 1 deadline set by the State Council aimed at cooling the overheated market.
"The number of reservations for flat viewing in Shanghai rose 30% over the weekend from the previous week after the city set its price growth target for the year," said Clement Luk, Centaline Property Agency's chief executive for the mainland's east and northeast.
"The target has sent a positive signal to homebuyers," he said.
Luk said there were now more luxury apartments priced at 15 million yuan (RM6.93 million) and above for sale as investors hoped to take advantage following the release of the targets to reduce their holdings.
On Mar 28, Shanghai announced it aimed to cap property price gains for newly built houses below the city's gross domestic growth (GDP) target of about 8% this year.
Guangzhou and Shenzhen used the projected growth in their GDP and residents' income to set an upper limit for the price increase target of their new housing, without specifying a fixed rate.
Other cities such as Hangzhou, Suzhou followed suit, but Jinzhou, Liaoning was the most aggressive in its target, which it set at an increase of 13% this year.
For the week from Mar 21 to 27, according to China's largest property website, Soufun, sales volume in Hangzhou recorded a week-on-week 73% increase; while Suzhou and Chengdu registered week-on-week growth of 30%.
David Ng, the head of regional property research at RBS in Hong Kong, believes this tolerance of price appreciation will alleviate buyers' concerns. "For Shanghai, we consider this is a positive development and believe launches previously withheld due to delayed pre-sale approval could be released to the market," he said.
Freddy Lee, managing director and chief executive at Shui On Land, said his company planned to release the latest phase of Rui Hong Xin Cheng in Shanghai in the middle of this month. "We will release the new phase of the development at the same price as the previous launch," he said.
Last year, Rui Hong Xin Cheng was sold at an average price of 27,700 yuan per square metre, according to Shui On's annual result for the year to December.
But sales in Beijing have remained flat after the municipal government proposed that its housing prices would be held stable with the prospect of a slight decline this year.
Kenneth Pak Kei-yuen, a senior general manager in the Beijing office of Hong Kong estate agency Midland Realty, believed market sentiment would be hurt by the forecast and prices would retreat in the capital.
Cashed-up developers would not be in a hurry to build new projects in Beijing, Pak said, while individual owners would be tempted to offer their units for lease instead of selling them at a big discount.
"Transaction prices have dropped by 3% to 5% as some owners want to sell their properties quickly," he said.
Daily average transactions in the secondary market in the capital city now average around 460 units versus 10,000 to 20,000 deals done during the market peak in 2009, said Pak.
In February, Beijing required non-local residents to prove they had paid taxes in the city for five years before they could buy a home there. — SCMP
SHARE
