Instead of heating up, property sales cool down

The economic downturn is taking a heavy toll on the country's already lackluster real estate market, Hu Yuanyuan reports

Chen Li, a 26-year-old real estate agent in Beijing, has been thinking about changing jobs recently.

He failed to manage any transactions after the Spring Festival, and the possibility of doing so gets more remote every day in the cooling property market.

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One of his clients wanted to sell a one-bedroom apartment along the southern Third Ring Road for 1.85 million yuan ($297,000), or 33,000 yuan per square meter. The client was willing to accept 1.72 million yuan for a one-off payment.

"The price is really competitive compared with a few months ago, but only two potential buyers asked about it in the three weeks since the apartment was registered," Chen said. The price of a similar apartment that sold in October was close to 40,000 yuan per sq m.

Data from the Centaline property agency show that only 8,943 pre-owned homes were sold in Beijing in March, the lowest monthly sales since 2009.

The pre-owned market is usually regarded as a barometer for the entire real estate market.

According to Sang Yufeng, an analyst with Century 21 Real Estate LLC, transactions in the country's major cities remained on the low side in early April, with the wait-and-see attitude extending to new homes as well as pre-owned ones.

"I don't think there will be a rebound in this month's property market, and most property developers are hurrying sales along with a flat-price strategy. Obviously, a healthy cash flow is the most important thing in such a market," said Sang.

According to the National Bureau of Statistics, fewer cities reported price increases, and the growth rate is slowing. In March, out of 70 major cities, 80 percent saw prices rise, the lowest level since January 2013.

The situation was even worse in smaller cities, where the housing stock exceeds the demand.