'Golden week' property sales plunge in major Chinese cities amid slowing economy, tight mortgage conditions

By Sandy Li sandy.li@scmp.com / https://www.scmp.com/business/article/3032030/golden-week-property-sales-plunge-major-chinese-cities-amid-slowing?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | October 10, 2019 9:48 AM SGT
Property sales in China's major cities saw one of their worst "golden week" holidays in years, as buyers held back amid a slowing economy and tight restrictions on mortgage loans.
Sales of new homes in Beijing dropped to their lowest level since 2014 during the week following the National Day holiday, according to data from the property information portal Zhuge.com.
By area, sales of new homes in Shanghai plummeted 86 per cent to 5,000 square metres, while the capital saw a 92 per cent plunge to 2,000 sq metre, according to data from Centaline Property.
Traditionally a peak period for sales, the seven-day holiday drew little interest from buyers who were unwilling to pursue big investments at a time when the national economy faces a slowdown caused by the trade war with the United States. Buyers' appetite was further depleted by banks tightening mortgage loans and Beijing's tougher measures to curb home prices.
Just 190 transactions were recorded in the primary residential market in Beijing during the golden week, down 19 per cent from 2018.
In the secondary market, 41 used homes had changed hands, the second poorest golden week sales performance in the capital in the past five years.
"Property sales of new homes and used homes in the golden week was disappointing," said Guo Shiying, chief analyst at Zhuge.com.
He expects the downward trend will continue as Beijing step up measures to cool the property market.
Clement Luk, a director for east China at Centaline Property, said the home-buying mood has been dampened by the tightening of mortgage lending and the prolonged US-China trade war that discouraged spending.
"People do not want to commit in big investment now, like purchasing any homes, as market sentiment has cooled quickly since March," he said. "Most owners prefer travelling during golden week holiday instead."
He said Centaline's sales during the week-long holiday were sluggish. "We managed to sell about 100 lived-in homes in a normal weekend. But we...