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Harsh winter for Beijing home sales

Sales of new and existing homes in Beijing plummeted 18.4 percent and 38.2 percent respectively last year, due to the government's efforts to cool the property market.

According to the city's housing regulator, new home sales in Beijing slumped to 90,605 units from a year ago. In terms of sq ft, sales declined 22.4 percent to 9.56 million sq ft last year, falling below 10 million sq ft for the first time in six years.

Meanwhile, transactions of existing homes dropped to 121,512 units, hitting a three-year low. Monthly sales of existing properties had remained below 10,000 units since April.

Zhang Dawei, Chief Analyst at Centaline Property, said that the decline was due to limits on home purchases, as well as the increase in mortgage rates and down-payment requirements.

Zhang noted that home buyers can expect more price drops this year, as the central government announced that property tightening measures would remain. Likewise, home prices in Beijing may fall between 10 and 20 percent in the next six to 12 months.

To bring down property prices, China has implemented a number of cooling measures since 2010, which include trial property taxes in the cities of Shanghai and Chongqing, bank lending restrictions and a ban on third-home purchases.

The National Bureau of Statistics revealed that new property prices dropped in 49 of the 70 cities from the previous month, compared to 33 in October. Related Stories:Chinese investors prefer funds to propertyAscott unit to manage CapitaMall Wusheng's serviced residencesChina to expand property tax reforms next year

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