Sharp fall in property prices in Chinese cities

BEIJING - Housing prices in Chinese cities have recorded a steep fall as a result of the new regulation restricting people from purchasing more than one home in urban areas.

Property sales have witnessed a sharp drop and there has been an increase in the number of cancellations of home orders in the cities that have introduced the new rule.

Dalian, in Liaoning province, is the latest to join the move to control the rampant property market. On Tuesday, it put a ban on the purchase of a second home by city residents, while denying home loans for migrants who have not worked in the city for at least one year, China Daily reported quoting a local official.

As per the new norms, the deposit amount for first and second home purchases has been raised in 13 cities to cool down the overheated property market.

Prices in Guangzhou hit more than 25,000 yuan a square metre in the busiest areas in previous months.

In Guangzhou, only 308 apartments were traded online Monday, according to the Land Resources and House Management Bureau. And the average price was 8,600 yuan ($1,320) a square metre, the lowest in two years.

In Shanghai, 799 apartments were traded Oct 11, but the figure was 420 Sunday. Daily property transactions fell by more than 60 percent over the past week, compared with the figures in September.

The secondary housing market is even more discouraging. Cancellations of orders have risen by as much as 10 percent for some real estate agents as a direct result of the city’s new policies.

“The government will stop unreasonable home demand and limit speculation in the property market,” housing management bureau officials explained.