September home sales slowed in China24 September, 2012, 10:26. Posted by Zarathustra
Septembers and Octobers are traditionally the peak season for Chinese real estate market. Last year, the peak season was not all that golden.
This year, the real estate market came back to life in the past few months. However, September did not seem to have a very great start. Since the start of the month till 20 September, transaction volume in 54 cities fell by 4.5% compared to the first 20 days of August, according to Chinese Securities Journal, citing figures from Centaline.
The relatively slow start for the peak season could probably be attribute to the fact the home prices curbs remain firmly in-place, particularly after home prices rose in the past few months. In terms of credit, after two rate cuts (which triggered the recent rebound), credit is not being eased any further. Meanwhile, real estate developers are putting up less homes for sales.
We are not sure if the slowing in new home sales is a sure sign that the rebound is over, but we certainly believe that the recent rebound is not sustainable. The resilience of the market, which could not last in our view, has partly contributed to the government’s slow reaction to the economic slowdown.