New house sales surge in major Chinese cities

New house sales have surged in major Chinese cities in recent weeks, as consumers expect prices to rise further in future, according to new industry figures. The number of newly-built housing units sold in 54 major Chinese cities soared 103 percent year on year in the first 13 days of 2013, reaching 104,800 units, figures from the Hong Kong-based real estate agency Centaline Group showed. During the first two weeks of the year, more than 90 percent of 40 major cities monitored by the China Index Academy posted larger housing transaction volumes than a year earlier. Many cities, including Beijing, saw the average square footage of housing sold weekly rise to more than double the amount sold during the previous period last year, the academy said. Strong demand for new houses has driven prices higher and relieved some financial pressure for property developers, said Zhang Dawei, marketing director of Centaline Group. "People are more willing to buy houses when prices go up. It's an old tradition in China," Zhang said. "Some potential demand has been unleashed, as home prices have rebounded recently." China's property market cooled after the government imposed strong control measures in 2010 but has shown signs of warming in recent months. In November, 53 out of a pool of 70 major cities recorded higher new home prices than a month earlier, up from 35 in October, according to data from the National Bureau of Statistics. In December, the total area of new housing sold in 30 major Chinese cities jumped 86.7 percent year on year to an annual high of 22.6 million square meters, according to Centaline Group data. The rebound in both house prices and transaction volume was caused by discounts offered by developers, government policy adjustments and consumers' changing expectations, Zhang explained. Chinese authorities have required higher down payments, restricted third-home purchases and built millions of affordable homes in an attempt to bring runaway housing prices down. But after revenues from land sales decreased and weakened property investment slowed the economy, some local governments "fine-tuned" their property policies starting in the second half of 2011 by allowing home buyers to borrow more from public housing funds, reducing taxes and fees or subsidizing home purchases. The market recovery since the second half of last year brought the total area of new housing sold in 30 major cities in 2012 to 198 million square meters, up 34.1 percent from a year earlier, Centaline Group figures showed. As long as the government does not tighten its grip on the property market, transactions will remain active, Zhang said. However, he does not expect drastic gains in prices or transaction volumes in 2013, as housing demand will not increase as fast as last year. A majority of people still consider property prices to be too high, according to a telephone survey of 5,000 urban dwellers conducted by the Canton Public Opinion Research Center in October. About 66 percent of the polled residents said housing prices are "unaffordable" at present and 83 percent said commodity houses are "expensive" or "relatively expensive," the China Youth Daily reported Tuesday, citing the survey results. Authorities have reiterated that they will maintain property market controls this year.