The signals we get during the Golden week holiday has been mixed. On one hand, tourists attractions were all full of people after the government waived highways fees and cut entry fees for some spots, and Hainan’s duty free shops are seeing tremendous sales growth. On the other hand, sales in Hong Kong‘s luxury sector seems to have declined instead.
In terms of the real estate market, the positive momentum from the summer has been losing steam. On a month-on-month basis, the Golden week transaction volume is down by about 70% compared with the first week of September according to Shanghai Securities News, citing figures on 54 cities from Centaline.
In terms of property prices, CREIS data show that home prices in 100 cities being monitored increased by 0.17% in September compared with the previous month, the fourth straight month of increase, although the pace of prices gain has slowed down.
The fading momentum possibly reflects the fact that the central government remains reluctant to loosen the grip of the real estate market despite worse-than-expected economic slowdown, fearing that home prices will rise very rapidly again. On top of that, it is also consistent our view that this “recovery” in real estate market since earlier this year will be short-lived.
This article originally appeared here: China’s golden week is not very golden for real estate developers
Also sprach Analyst – World & China Economy, Global Finance, Real Estate
Read more posts on Also Sprach Analyst »