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China / Cover Story

Peak season, weak sales

By Zheng Yangpeng (China Daily) Updated: 2012-10-04 07:57

Real estate developers are lowering their expectations for 'Golden September and Silver October' as fewer homebuyers turn out, Zheng Yangpeng reports.

September and October are as important to China's property developers as Christmas is for retailers in the West. Potential homebuyers are more likely to buy during these months, commonly known in China as "Golden September and Silver October". The sales campaign is fierce: Newspapers are full of ads for new property projects; brochures are frequently being handed out to passengers on the subway; and the story of how developers raced to launch newly built projects earlier this month have become the common fare of radio programs. Meanwhile, public data show that the sales battle has intensified.

Based on the presale permits granted to developers, Hexun, a financial news website, estimated that 55 projects will come on the market in Beijing this month, a record high for the year.

By comparison, only two projects went on sale in August.

Peak season, weak sales

Two visitors look at house information at a real estate agency in the Chaoyang district of Beijing. Despite the month-on-month decline, September house sales have been stronger than a year ago. [Photo / Xinhua]

Insiders said developers simultaneously slowed the pace of new releases in August, as they sought to save their best projects for the September-October period.

But despite all the excitement, it seems increasingly as though developers are fighting the battle halfheartedly.

Waning enthusiasm

Wang Tong, a public relations manager with a major real estate developer, said his company will roll out a raft of new projects this month, just like the other property outfits.

However, he insisted the company isn't pinning all its hopes on September and October.

"We don't expect the number of transactions to surge dramatically during these two months," he said.

Potential buyers have fallen into two distinct camps. Some plan to loosen their purse strings during the two-month period because they fear that prices may continue to rise in the foreseeable future.

Others say their willingness to buy has been dampened by rising prices, so they have adopted a wait-and-see attitude.

In a poll conducted by Soufun, a major property website, 30.23 percent of respondents said they planned to buy a house during the two-month period. Meanwhile, 51.16 percent said they will make a decision based on changes in house prices.

Wang said the developers' ability to supply was undermined by an unexpected buying spree in June.

"Many developers saw their highest turnover in June, and the buying fever continued into July and early August. As a result, the stock of homes available has declined rapidly during the past three months, constraining the developers' ability to push out new homes in September and October," he said.

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