Value of new home sales drops 9.2% in H1

By Cherry Cao | July 16, 2014, Wednesday |

Online Edition

THE first half of 2014 registered easing sentiment among homebuyers with new residential sales dropping at a slower pace by both value and volume, indicating a stabilizing trend even though overall industry momentum remained on the soft side.

The value of new homes sold across the country dropped 9.2 percent from the same period a year ago to 2.56 trillion yuan (US$412.9 billion) during the January-June period, the National Bureau of Statistics said today on its website. In the first five months, the value fell 10.2 percent year on year.

The volume of new homes sold, meanwhile, retreated 7.8 percent from a year ago to 256.3 million square meters, compared to a 9.2 percent annual drop in the first five months.

"The country's real estate market saw declines in new home sales in the first half of this year and housing prices in second- and third-tier cities also headed southward," said Sheng Laiyun, a spokesman with the bureau. "The robust performance in the first half of 2013 led to the year-on-year retreat. It was also a normal correction of the market which should be good for both the healthy development of the property market as well as a sustainable national economy."

Tightened credit at commercial banks coupled with continuously high home prices jointly prevented home searchers from entering the market in the first six months of this year while cautious sentiment also hung over real estate developers amid sluggish property sales, industry analysts said.

Investment in housing developments, for instance, rose 13.7 percent year on year to 2.87 trillion yuan across the country in the first half, compared to a 14.6 percent rise in the first five months, the bureau's data showed.

China's housing market has entered a correction period with new home inventories in most cities reaching record high levels while home buyers, most of who are waiting for significant price cuts, remain reluctant to seal a purchase deal.

Average home prices in 100 cities fell 0.5 percent in June after shedding 0.3 percent in May, the first month-on-month decline since June 2012.

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Value of new home sales drops 9.2% in H1

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