China’s property prices are likely to decline further in the coming months amid high inventories, the China Securities Journal reported on Tuesday, citing analysts.
Of the 70 major Chinese cities in a survey, 64 reported that new-home prices fell in July from the previous month, compared with 55 in June, although some some cities have eased their housing purchase restrictions.
Chen Guoqiang, deputy chairman of China Real Estate Society, was quoted as saying that property prices have yet to hit bottom and are expected to continue their decline because of rising stockpiles.
Property area for sale rose to 552.3 million square meters at the end of July, up 8.02 million square meters from the end of June, the report said.
While first-tier cities face bigger pressure to absorb new home inventory, which stood at 34 million square meters in July, up 4.4 percent from the previous year, when buyers were taking a wait-and-see approach, it said.
With a flagging market, property developers either slowed investments and bidding for new sites, or revised down full-year sales target and offered price cuts to boost sales, according to the newspaper.
More local governments will take measures to save the property market given their heavy reliance on land sales for fiscal revenue, analysts say.
While a relaxation in credit will help boost the market, some analysts suggest that local governments further loosen purchase restrictions, the report said.
– Contact us at [email protected]