Beijing Central Business District skyline.
The Beijing government said results of the new property cooling measures rolled out in March have started to manifest, with online transaction volumes dropping 16.7 percent in the 10 days following the new curbs, reported Reuters.
Property sales by floor area declined 15.4 percent from Q1 2016, a pace five percentage points quicker than that seen in the first two months of 2017. The resale market has also cooled significantly, noted the city government.
“With demand dropping, it’s possible (Beijing) housing prices, especially in the resale market, may drop,” said a city government spokeswoman.
Beijing unveiled new measures in mid-March following a hike in home prices and sales despite the curbs introduced late last year. The new curbs included increasing the minimum down payment for a second home from 50 to 70 percent to 60 to 80 percent depending on the type of home.
However, the spokeswoman conceded that buyers may have to adopt a wait-and-see stance as the policy adjustments takes time to sink in.
“The impact of the new policies will become increasingly visible in April or in the even longer term,” she said.
Based on data from the National Bureau of Statistics, resale home prices in Beijing rose 2.2 percent month-on-month in March, while new home prices climbed 0.4 percent month-on-month.
This article was edited by Denise Djong.