Beijing home sales plummet in 2011

Sales of both new and existing homes in Beijing plummeted in 2011 as a result of the government's efforts to cool down the runaway property market.

New home sales in Beijing dropped 18.4 percent to 90,605 units in 2011 from a year ago, the Beijing News reported Monday, citing data from the city's housing regulator.

In terms of square footage, sales slumped 22.4 percent to 9.56 million square meters last year, falling below 10 million square meters for the first time in six years, the paper said.

Existing property transactions also plunged. Sales in 2011 shrank 38.2 percent to 121,512 units, hitting a three-year low.

Monthly sales of existing homes have stayed below 10,000 units since April, the paper said.

Increased down-payment requirements and mortgage rates, as well as limits on home purchases, led to the declines, the paper said, citing Zhang Dawei, a chief analyst with Centaline Property.

Consumers will likely expect further price drops in 2012, as the government has reiterated that it will maintain the policies, Zhang said.

Property prices in Beijing are likely to fall 10 percent to 20 percent over the next six to 12 months, he said.

China has introduced a series of tightening measures to bring property prices down since 2010, including bank lending restrictions, a ban on third-home purchases and trial property taxes in the cities of Shanghai and Chongqing.

The government's policies will be maintained in 2012 to bring housing prices to a reasonable level, according to the country's central economic work conference last month, which mapped out policies and goals for the coming year.

New home prices dropped from the previous month in 49 of the 70 cities included in the government's statistical pool in November, compared with 33 in October, according to the national statistics bureau.