No Mid-Autumn Festival pick up for China new home sales - and October deals could decline too

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3027691/no-mid-autumn-festival-pick-china-new-home-sales-and?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 26, 2019 10:38 AM SGT
A steep decline in home sales during China's three-day Mid-Autumn Festival holiday, a period when such transactions usually peak, suggests the mainland property industry might miss a traditional high season altogether this year.
Only four new homes were sold in Beijing during the first two days of the festival, down from 180 units sold last year, according to brokerage Centaline Property Agency, in an indication the deteriorating economy was weighing on the sector.
In the financial centre of Shanghai, 136 new homes were sold during this period, a decline of 32 per cent year on year. In the technology hub of Shenzhen, across the border from Hong Kong, new home sales dropped by about half to 76 units.
"The usual September pick up in activity in the housing market no longer exists, for sure," said Zhang Dawei, chief analyst at Centaline. "Market sentiment has cooled, and it is very difficult to see a sudden turnaround even in October."
September and October host two major holidays in China, the Mid-Autumn Festival and National Day, and traditionally witness spikes in consumption, including home buying. And as developers struggle to maintain sales momentum, it is feared September's declines might leak into October as well.
Analysts said the downward trend was likely to continue amid a slowdown in Chinese economic growth. The year-long US-China trade war has made homebuyers wary of big purchases. The country's industrial production growth, an important gauge of manufacturing output, slowed to 4.4 per cent in August, a new 17-year low. China's domestic output growth had already reported its slowest quarterly pace in three decades in the second quarter.
At the same time, Beijing has refused to use the property market to stimulate the economy, and has moved to stabilise home prices with a slew of cooling measures. In the first eight months of this year, the central government issued 367 new regulations across the country, an on year increase of 17 per cent as well as a new high, according to Centaline.
The state-run Xinhua News Agency reported last...