Translated by Andrew Vanburen from a Chinese-language piece in First Financial
THE BEARS MAY BE running the bourse, but the bulls are "in the house”... the housing market, to be more precise.
A total of 16.3 million square meters in new home floor space changed hands last month in China’s top 30 urban markets
Thanks to interest rate action, property-friendly policies and a reluctance to overcharge homebuyers in a shaky economy, the real estate sector -- in terms of transaction volumes -- has been outperforming all other industries of late.
And June looks set to be another red-letter month for those buying properties.
According to statistics from property play Centaline, the conflux of an excess supply of units hitting the market and generally lower real estate prices across the board has led to the surge in sales this Spring.
The buying frenzy last month represented the largest volume of floor space trading hands since January 2011.
For the 31-day period, the total property turnover rose 20% from April levels and 28% from a year earlier, while also topping March’s previous year-to-date high by some 3%.
If one discounts the two medium-length national holiday breaks in April, then May would represent the third consecutive month of impressive property turnover performance.
“Although a lot of the regional government policies have not had a concrete effect on the property sector and amount to little more than tinkering around the edges, there has been a decided impact from the net sum of all the pro-property policies and credit easing.
"This has all resulted in a rising volume of transactions and has no doubt moved forward the timeframe for property purchases for many consumers,” said Mr. Ge Ling of Centaline Research.
However, despite more affordable housing prices in the sector, the savings potential is not spread evenly across the entire industry.
Homebuyers in large urban Tier I property markets are more or less fully enjoying the lower prices on hand, but this trend is taking its time spreading to Tier II and Tier III cities across the country.
Meanwhile, while prices for high-profile developments in the suburbs are in virtual “discount mode,” the lower prices have yet to make a noticeable appearance in more of the older, established residential districts closer to downtowns.
“Under this ‘self-adjustment’ phase of China’s property sector, it is easy to envision prices in urban developments continuing to soften this month and transactions carrying on their upward ascent.
“However, homebuyers and investors should be aware that market tolerance for continued price decreases does have its limit,” added Mr. Ge.
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