Affected by the off-season during the Spring Festival holiday, property transaction volume across the country slumped in January, with 90% of cities seeing month-on-month declines and some cities even experiencing a “halving” of volume.

 

　　Beijing and other hotspot cities bore the brunt. According to statistics from Yayao Institution, only 7 projects opened for sale in Beijing's property market in January. Whether compared with the 17 projects that opened in January 2013 year-on-year, or the 24 projects that opened in December last year month-on-month, Beijing's property supply showed a marked sharp decline at the start of 2014.

 

　　At the same time, Beijing's property transaction volume in January was also “halved.” Yayao Institution statistics show that in January a total of 6,908 commercial residential units were sold in Beijing, with a transaction area of 744,200 square meters; both the number of units sold and the transaction area shrank by about 40% to 50% month-on-month and year-on-year.

 

　　Similar to Beijing, according to monitoring by the China Index Academy of residential market transactions in January in 43 major cities, including the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, more than 90% of cities saw month-on-month declines in property transaction volume. Specifically, among the 43 cities, Bengbu had the largest decline at 56.78%, followed by Dalian at 53.11%. In addition, Shenzhen fell 44.4%, Beijing 36.8%, and Shanghai 30.65%. Among the cities where transaction volume rose, Xiamen had the largest increase at 1,919.78%, followed by Nanchang, up 473.82% month-on-month.

 

　　In terms of transaction prices, half of the 43 cities saw slight month-on-month increases, with Wenzhou posting the largest increase at 16.89% and Luzhou the largest month-on-month decline at 9.02%. Among the 10 key cities including Beijing, Shanghai, Guangzhou and Shenzhen, all except Nanjing, Wuhan, Tianjin and Hangzhou, where prices edged down month-on-month, saw increases, with Chengdu posting the largest rise at 11.91%.

 

　　The China Index Academy analysis believes that overall, affected by the Spring Festival in January 2014, most cities saw transaction volumes fall markedly from the previous month. In terms of prices, first- and second-tier cities showed a trend of steady increases, while third- and fourth-tier cities showed slight steady declines.

 

　　Ren Qixin, deputy general manager of Yayao Institution, analyzed that the sharp contraction in both supply and demand in Beijing and other property markets in January was due to the traditional factor of the Spring Festival slow season as well as some special reasons. Under the combined effect of factors such as tighter price-cap orders in many cities at the end of 2013, contraction of credit policy, acceleration of self-occupied housing supply, and gradual changes in land supply structure, developers' wait-and-see and reluctance-to-sell sentiment continued to intensify in the short term, and their enthusiasm for launching projects dropped to a historic low, becoming the fundamental reason for the weak supply and demand in January.

 

　　Ren Qixin expects that, hit by the Spring Festival holiday, project launches will gradually increase starting in late February, so short-term supply and demand pressure will still exist. “However, given the peak in land transactions that began in 2013 and continues to this day, which will gradually translate into actual supply this year, overall inventory pressure in the property market will not persist over the long term, nor will it form a significant expected impact on the market.”