Shanghai developer cuts prices
Gold Tai Yuen Group, a Shanghai-based property developer, announced over the weekend a nearly 30 percent price cut for its high-end residential project in a Shanghai suburban area, the latest sign of a property cooling down in first-tier cities.
“The price is now 36,000 yuan ($5,724) per square meter on average, and we will offer 60 apartments this time,” a staff member at the sales office, who did not give her name, told the Global Times on Sunday.
The Yulong Palace project, located in Shanghai’s Pudong New Area and still under construction, has 113 apartments for sale ranging from 220 to 300 square meters. Since sales of the project kicked off on October 26, 2013, only 7 units have been sold as of Sunday, with an average price of around 50,000 yuan per square meter, data from the Shanghai Real Estate Trading Center showed.
The price cut is to celebrate the 18th anniversary of the group’s establishment, Gold Tai Yuen said in a statement sent to the Global Times.
But analysts said the pricing of the project is still too high. In comparison, the average per capita disposable income of Shanghai’s urban residents was 43,851 yuan in 2013, according to data from the Shanghai statistics authority.
Gold Tai Yuen’s move has also strengthened views the cooling down of property prices has now spread to first-tier cities from second- and third-tier cities like Hangzhou in East China’s Zhejiang Province and Wuxi in East China’s Jiangsu Province, where some developers have been cutting new home prices since February.
“It’s just a start. I believe more developers will join in to cut their home prices in first-tier cities as a means to spur sales and recoup funds, especially those cities with large inventories of unsold apartments,” Yang Hongxu, deputy director of E-house China R&D Institute in Shanghai, told the Global Times Sunday.
New home sales have cooled down remarkably in the first quarter in Shanghai, given banks’ credit policy adjustments and potential homebuyers’ wait-and-see attitude, the local statistic authority said in a statement published on Wednesday.
Sales of new homes grew by 6.1 percent year-on-year to reach 4.185 million square meters in the first quarter of 2014, compared with a 43.3 percent year-on-year growth seen during the same period last year, the statement said.
In Beijing, growth of home prices will rise at a slightly slower pace this year compared to last year, as the municipal government plans to build 50,000 units of affordable homes, the Beijing Academy of Social Sciences said in a report released Thursday.
Yang expects the sluggish property market to have a negative influence on China’s economic growth this year.