The Hangzhou branch of the National Development and Reform Commission (NDRC) has ordered the city’s property developers to inform the government agency before undertaking any large-scale cuts in the prices of new homes, China Business News reported Thursday.
The housing market in the coastal city has seen both prices and sales volumes fall over the past three months. Data showed contracted sales amounted to 10,112 units in the three months to March, down 37.8 percent from a year earlier and marking the lowest level since 2009. The average home price during the period was 15,388 yuan (US$2,465) per square meter, down 11.3 percent from a year ago, the report noted.
Meanwhile, housing stock inventory has risen to record high 76,004 units as of end-March, up 36.2 percent from a year earlier. More than half the unsold homes are larger than 90 square meters. The combination of falling prices and rising inventories sends a danger signal on the market.
Despite slower sales, authorities were quoted as saying that developers are basically having no problem in funding their operations, and that there is no risk of a broken funding chain.
The NDRC branch said the Hangzhou housing market is basically stable as of now and that there is no sign that developers are selling homes below cost, according to the report. Price cuts could be taken as just some reasonable adjustment.
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