"I expected sales revenues last month would drop about 40% from September's figures after the central government announced the new round of austerity measures," said Luk, Centaline Property Agency's chief mainland executive for the east and northeast of the country.
"But when we reviewed the performance, the decline was just around 20%."
Commission incomes achieved by the Shanghai office totalled about 50 million yuan (RM23 million) last month, compared with more than CNY60 million in September. "The negative impact of the new policy measures was less serious than we expected," said Luk.
On Sept 29, the central government announced a number of measures to cool the red-hot market. Among them was a 10% increase in required down-payment for first-time buyers from 20% to 30% of the purchase price.
The down-payment requirement for second property buyers was raised to at least 50% from 40%, and banks were forbidden to provide loans to buyers seeking a third property.
The central government measure also required local governments to restrict the number of homes that people could buy in cities where prices were deemed too high.
Government officials in at least 14 cities, including Shenzhen, Shanghai and Beijing, have already responded to the central measures by restricting property buying in a move to reduce demand.
The full impact of the new measures would not be evident until official data on all property sales was released later this month, said Luk. But meanwhile, the impact could be gauged from anecdotal evidence provided by property agents and some unofficial figures.
A total of 1.32 million square metres of new residential flats were sold in Shanghai last month, almost unchanged from 1.33 million square metres registered in September, according to mainland media.
"This did not happen only happen in Shanghai. The picture is similar in other cities such as Shenzhen and Beijing," said Luk.
Dickson Wong, chief executive of Centaline's northern and southwest China office, said: "Sales activities in our Beijing branch fell about 20% and businesses in second-tier cities such as Chongqing and Chengdu remained stable."
Wong said when Beijing announced the measure to limit residents to buying just one property in April, sales volumes immediately fell 60%. Tianjin also announced a similar measure this time around, but the fall was less than 30%, judged by sales revenues of Centaline's Tianjin branch, said Wong.
In Shenzhen, agents said sales volume last month fell 30% from a month ago.
When the government announced this year's first round measures in April, sales volume fell 50% from March, according to Samuel Wong Shu-kuen, who heads property agent Midland Realty's Shenzhen office.
"Buyers and sellers are relatively calm so we are continuing to see buyers entering the market even though sellers are not slashing prices," said Luk. Buyers generally did not believe that home prices would fall substantially, he said.
Strong home demand, ample liquidity and sound economies had prompted some financially sound home seekers to enter the market, agents said.
New home prices rose 0.7% to CNY8,418 per sq m from the previous month, property research firm China Index Academy said on Monday, citing property prices in 100 Chinese cities.
But the market outlook was unclear, said agents, with both Wong and Luk warning that the liquidity environment would deteriorate and purchasing power would weaken if the central government continued to increase interest rates.
Last month, the People's Bank of China raised the benchmark interest rate by 25 basis points and the China Banking Regulatory Commission ordered domestic banks to raise mortgage rates for first-time home buyers.
As of Nov 1, mortgage applicants looking to buy their first home will have to pay interest on their home loans at a rate of 85% of the national base interest rate, compared with 70% of the base rate previously. More measures are expected to come.
Mainland media reports indicated Shenzhen might become the first city in the nation to implement the property tax trial before Shanghai and Chongqing at a rate of 0.5% to 0.6% of the value of the property. — South China Morning Post
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