Home sales in China dropped 13 percent in April compared to the figures of a month ago due to the housing curbs imposed by the Chinese government.
According to the reports published by the National Statistics Bureau Data of China, home sales in April declined to $80 billion from $92.7 billion recorded in March 2013. Around 854 million square feet of residential space was sold in April, which is down 15 percent from the figure in March.
Home sales grew to reach around $275 billion in the first quarter of 2013, down 3.8 percent from the growth in sales of the first quarter of 2012. Moreover, the total real estate investment in China was around $312 billion in the first quarter of 2013, which is around 20.2 percent lesser than the figures of the first four months of 2012, reports The South China Morning Post.
The stringent property curbs that the government has imposed are the major reason behind the fall. Recently, the administration declared that all major states were required to adopt a strict capital gains tax law on home sales. A 20 percent capital gains tax was declared on used home sales. Early in March 2013, the central government also increased second mortgage interest rates and the down payments on home purchases, reports Today Online.
Apparently, thirty five cities have adopted the measures so far. Beijing and Shanghai were among the first few cities to impose these steps.
However, most builders have already achieved their sales targets for the year. Some of them expect the sales to hold steady until June as the supply will remain strong. But if the sales continue to climb, harsher policies may be on the way, reports The South China Morning Post.
"The decline largely had to do with the high March sales because developers supplied a lot of homes ahead of the government's curbs. But the government may issue more harsh policies if home prices continue to climb," Jeffrey Gao, a Shanghai-based property analyst at Macquarie Capital Securities, said to Bloomberg.
While home sales have dropped, home prices are still high and have accelerated in the past few months. This is affecting the "Chinese Dream" of having a home.
