China property sales drop in 2014, but positive signals emerge

By Cherry Cao | January 20, 2015, Tuesday |

Online Edition

THE value and volume of new home sales in China fell in 2014 from a year earlier as a result of market correction, according to latest data released by the National Bureau of Statistics.

But some positive signals finally emerged during the last few months of the year mainly due to the loosening of administrative curbs as well as changes in mortgage policies.

Between January and December, new homes sold across the country declined 7.8 percent from 2013 to 6.24 trillion yuan (US$1 trillion), the bureau said in a statement posted today on its website.

That compared to a 9.7-percent drop registered in the first 11 months, according to the bureau's data.

By volume, about 1.05 billion square meters of new houses were sold nationwide last year, a year-on-year decrease of 9.1 percent. That compared to a 10-percent withdrawal recorded for the January-November period.

"While the country's real estate market started to see a correction from the beginning of 2014 with both sales and prices heading south, our data collected in the fourth quarter somehow demonstrated some encouraging signs after some local governments loosened the home purchase restrictions and the central bank made some adjustment in mortgage and finance policies," Ma Jiantang, head of the statistics bureau, told a press conference held today.

Major supportive measures by the People's Bank of China included a cut in one-year lending rate by 0.4 points to 5.6 percent, which went effective November 22, 2014. The interest rate cut was the first in more than two years.

According to a report released over the weekend by the bureau, house prices across the country declined at a slower pace in December amid improved sentiment among buyers, with the four first-tier cities, in particular, recording average price rebound from a month ago in both new and existing home markets, bucking an overall ongoing trend in 70 major cities.

The purchases of commodity properties — covering all types of real estate — totaled 1.2 billion square meters worth 7.6 trillion yuan last year, a drop of 7.6 percent and 6.3 percent, respectively, from 2013, according to the bureau.

Meanwhile, investment in real estate development in all segments, including residential, office and retail, rose 10.5 percent year on year to 9.5 trillion yuan across the country in 2014, the bureau said. That, however, was a retreat of 9.3 percentage points from 2013, the bureau's data showed.

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China property sales drop in 2014, but positive signals emerge

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