Chinese property sales dropped for the first time in September for the past 2 years
According to Reuters, based on official data released on October, property sales by floor area eventually fell 1.5% in September from a year earlier, compared with a 4.3 per cent increase in August and a 34 per cent jump in September 2016.
"The might be a hint of showing the property boom has already passed its peak," said by Synergy’s Analyst.
"We have seen some big rebounds at the end of the first and second quarter, but given how fast the sale numbers are declining, we expect no big rebound this time." New construction starts by floor area, a volatile but telling indicator of developers' confidence, rose just 1.4 per cent in September on-year, slowing from a 5.3 per cent increase in August, Reuters calculated.
The softening in property activity appeared to drag on broader growth in the third quarter, as many economists had predicted. China's economy grew 6.8 per cent in the third quarter from a year earlier, easing from 6.9 per cent in the second quarter.
Property investment did rise 9.2 per cent in September, picking up pace from an expansion of 7.8 per cent in August, but analysts noted such investment usually lags sales trends by up to six months.
Investment in the first nine months of the year rose 8.1 per cent from a year earlier, compared with 7.9 per cent in Jan-Aug. The figure mainly focuses on residential real estate but also includes commercial and office space.
While home prices have levelled off or softened in the biggest cities in recent months in response to a flurry of government cooling measures, property bubbles are still a threat in other parts of the country.
A flurry of small cities have had to unveil fresh property curbs in recent weeks after speculators turned their attention to less-restricted cities that have massive overhangs of unsold houses.
Moreover, high prices are forcing many home buyers to take on more debt, potentially weighing on future household consumption and leaving banks more exposed to any property downturn even as Beijing looks to rein in financial system risks.
Household loans, mostly mortgages, rose to 734.9 billion yuan (S$150.6 billion) in September from 663.5 billion yuan in August, despite rising mortgage rates, according to Reuters calculations based on the central bank's data out on Saturday.
Short-term loans also soared in the third quarter, suggesting speculators may be trying to circumvent property cooling measures, economists said.
Policymakers have made stabilising the overheated property market a top priority ahead of a critical Communist Party Congress this week, reiterating the need to avoid dramatic price swings which they fear could threaten the financial system and harm social stability.