Property market recovery slows

Fewer Chinese cities saw home prices rise in August compared with the previous month, indicating the recovery momentum of the property market in the past four consecutive months has slowed down, according to data released Tuesday by the National Bureau of Statistics (NBS).

New home prices rose in 36 of the 70 major cities tracked by the NBS in August month-on-month, down from 50 in July.

Home prices in each of the 36 cities increased by no more than 0.6 percent in August month-on-month, down from a 0.7 percent rise in July.

Signs of the property market warming up had sparked concerns of a rebound in prices, which would undermine the effect of the government's curbing policies.

"The real estate market will cool down after a slight recovery driven by strong demand for apartments, and a dramatic rebound is unlikely before the end of this year if government policies are not loosened," Chang Qing, an analyst at real estate brokerage Homelink, told the Global Times.

Demand for homes from people intending to live in them rather than buying them for speculation has been accumulating since the introduction of the government curbs, and is one of the causes of the market recovery in the past few months.

"But potential homebuyers took a wait-and-see attitude again when home prices rose," Chang said.

September and October is the traditional peak season for home sales, but a surge in home purchases is unlikely this year, Chen Baocun, deputy director of the research institute with the National Real Estate Managers Association, told the Global Times.

The total volume of home sales in the first eight months declined by 4.8 percent year-on-year, according to the NBS.

In August, the total area of residential properties available for sale increased by 790,000 square meters compared with July.

"The developers need to speed up sales of apartments to protect their cash flow," Chen noted.

Chen said that since there is no sign that the central government will loosen its curbs, the developers will suffer a difficult time in the coming months.

The State Council dispatched eight teams to investigate the implementation of the property curbs in late July, prompted by the rebound in home prices since May.

According to the report on the investigation released last month by the central government, in most places the curbs are being properly implemented.

Developers have responded by making efforts to modify their business strategy.

"Unlike two years ago, when developers could make money much more easily, now they must try their best to develop products with innovation and high quality," Tong Jianliang, general manager of Ningbo Longfor Real Estate Development Co, told the Global Times.

Some developers like China Vanke Co and Gemdale Corp have also announced that they will start investing in retirement properties, given that the rest of the property sector remains depressed.