Sales fall as price of homes stays high

SALES of new homes in Ningbo, Chongqing, Chengdu, Beijing and Nanjing showed the biggest decrease in 2008, according to a report by E-House (China) Holdings, a real estate service provider.

Total sales of new houses, excluding those designated for relocated residents, dropped 61.9 percent year-on-year in Ningbo in eastern Zhejiang Province, and by 54.9 percent, 49 percent, 39.2 percent and 39.1 percent respectively in the other cities, E-House said.

"Without exception, all the top losers witnessed huge gains in home prices in 2007 while no major concessions were made over the past year," Xue Jianxiong, an analyst with E-House, said. "That's the major reason for sluggish sales in those cities."

Statistics released by the National Development and Reform Commission showed that house prices in the five cities rose 14.8 percent, 13.5 percent, 9.3 percent, 15 percent and 7.2 percent, respectively, in December 2007.

Meanwhile, sales in Guangzhou, capital of southern Guangdong Province, boomed after home prices dropped 15.1 percent on average from a year earlier, the biggest drop of all China's cities.

Sales of new homes, excluding those built for relocation, jumped 24.7 percent in Guangzhou last year, the E-House report said.

Pang Yuan, deputy head of Shanghai Municipal Housing, Land and Resource Administration Bureau, told an industry forum earlier this week that developers had to respond to the changing scenario by offering more reasonable or lower prices.