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October 22, 2014

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New home deals in China drop, project investments rise slowly

THE value and volume of new home sales in China fell at nearly the same pace in the first nine months of this year while investment in housing development rose more slowly, the National Bureau of Statistics said yesterday.

New houses sold across the country fell 10.8 percent in the January-September period from a year earlier to 4.05 trillion yuan (US$661 billion), the bureau said on its website. In the first eight months, the value fell 10.9 percent year on year.

Meanwhile, 676.7 million square meters of new homes were sold in the first three quarters, down 10.3 percent from a year ago. They sank 10 percent year on year between January and August.

“The correction in the country’s housing market since the beginning of this year has been mild,” said Sheng Laiyun, a bureau spokesman. “The recent easing of mortgage rules for some home buyers should help the market strengthen though the real impact on the market will take some time.”

Jenny Wu, director of residential sales for East China operations at DTZ, a global property services firm, agreed.

“The new mortgage policy should leave a positive impact on the country’s housing market with notable increases in home transactions expected in the last quarter of this year,” Wu said.

On September 30, the People’s Bank of China unveiled a cut in mortgage rates and minimum down payment levels for some home buyers in one of its biggest moves this year to boost an economy increasingly weighed down by a sagging housing market.

Buyers who own a home and had paid off their mortgage will be considered first-time buyers and get discounted mortgage rates of up to 30 percent off the benchmark lending rate. The new down payment is that all first-time home buyers can pay as little as 30 percent of the total price.

Investment in housing developments rose 11.3 percent to 4.67 trillion yuan in the first three quarters of this year, the bureau said. In the first eight months investment rose 12.4 percent.




 

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