Homes get cheaper as prices plummet in Hangzhou

By Zhang Ye Source:Global Times Published: 2014-4-26 0:38:01

Some large-scale real estate developers started lowering prices or launching promotions for homes in Hangzhou, the capital of Zhejiang Province after local home sales experienced huge drops in the first quarter, National Business Daily reported Friday.

China Vanke Co Ltd is set to kick off a promotion for one of its complexes in Hangzhou, over the weekend, selling some new homes for roughly 1.6 million yuan ($255,800), down from an original price tag of 1.8 million yuan, said the report.

This is a prime example of the generally gloomy picture of China's property market due to a tightened credit policy and oversupply, but performance in first-tier cities, especially Beijing and Shanghai, is still fairly stable as a result of high demand, said Zhang Huaxue, deputy general manager of China Index Research Institute.

"While second- and third-tier cities may continue seeing large-scale price cuts this year, price inflation in first-tier cities will continue but become more moderate," he told the Global Times.

Data from the Shanghai-based E-House China R&D Institute shows that in the first quarter, home sales in China hit 201.10 million square meters, down 3.8 percent year-on-year and the average selling price per square meter declined 1.5 percent year-on-year.

Hangzhou has witnessed a particularly big slide in sales. The city sold 10,112 homes in the first quarter, down 37.8 percent year-on-year, with the average price per square meter also fell by 11.3 percent from last year, one local newspaper, the Qianjiang Evening News reported Wednesday.

Given this, the Hangzhou Development and Reform Commission suggested at a Tuesday conference that a forecast system needs to be set up in order to allow real estate developers to inform authorities of big price adjustments in advance.

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