Home sales rise at slowest pace in 2011

The country's home sales last year rose at the slowest pace in three years, and analysts predicted the market may worsen this year as the government continues property curbs. Home sales increased by 3.9 percent in 2011 over the previous year, 4.1 percentage points slower than 2010, the National Bureau of Statistics (NBS) said Tuesday. The volume of home transactions climbed 10 percent to 4.86 trillion yuan ($769.69 billion). "The growth figure exceeded public expectations," Chen Guoqiang, deputy director of the China Real Estate Society, told the Global Times yesterday. "People always pay much attention to the country's major cities, including Beijing and Shanghai, which witnessed lackluster growth last year, but the sales volume increased faster in smaller cities," Chen noted. The property market in 2011 still performed better than in 2008, when the total sales area and transactions declined by 20.3 and 20.1 percent respectively year-on-year, according to NBS data. But Chen said the property market will further slow this year with the government maintaining its curbing policies, and the key figures in the fourth quarter of 2011 indicated that the sector has entered into a downturn. The prosperity index for the property sector, a gauge to assess the industry's operational conditions, declined 12.2 points to 107.2 points in the fourth quarter of last year, NBS data showed. So far, around 60 percent of 20 listed developers have announced in their annual reports that they have not completed their sales targets of 2011, according to a report prepared by property brokerage Centaline China Real Estate. However, Evergrande Real Estate Group, whose major businesses are concentrated in the second- and third-tier cities, saw its sales volume increase by 59.4 percent in 2011 year-on-year, exceeding the target of 14.8 percent, according to the developer's report. "Some of the country's second- and third-tier cities, where purchase restriction policies are not carried out, witnessed a boom in their property markets last year," Liu Yuan, a senior research manager at Centaline China Real Estate, told the Global Times Tuesday. Liu said it was hard to assess whether the property market in the smaller cities was growing at a healthy pace, and whether speculation was rampant or not, because of "a lack of precise data." But Liu said there are no systemic risks so far, since the leverage ratio of the country's property sector is relatively low. "Chinese buyers make higher down payment than in the Western countries like the US, where subprime crisis broke," Lin noted.