China's Fuzhou sees stable property prices despite fall in sales: Xinhua

October 25, 2016 8:30 AM EDT

A woman walks past a property poster outside luxury apartment blocks in central Beijing, China, March 15, 2016. REUTERS/Jason Lee

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BEIJING (Reuters) - Home prices are relatively stable in the southeastern Chinese city of Fuzhou while sales have dropped significantly after further tightening measures, Xinhua state news agency reported on Tuesday, citing data from local property agencies.

Fuzhou, the capital city of Fujian province, was one of the most overheated cities this year. Official data showed home prices in Fuzhou soared 26 percent in the year to September.

The city introduced stricter policy measures during China's National Day holiday week, including requiring higher down-payments.

Sales volume for new homes is estimated to have since dropped 80 percent month-on-month, while that for second-hand homes dropped around 60 percent, Xinhua said, citing data from multiple property agencies.

"According to reports from our sales offices, sales have all suffered obvious declines," Cai Jun, general manager at Centaline in Fuzhou, was quoted as saying.

But prices have remained relatively stable, as developers who benefited from strong sales in the past have little incentive to lower prices.

"Previous experience showed that reducing the price doesn't help sales much," Xinhua quoted Wang Azhong, director at the real estate center of Fuzhou University, as saying.

"Instead, if you do so, people might be increasingly hesitant to buy."

(Reporting by Yawen Chen and Nicholas Heath)

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