Property sales at China Vanke Co. fell for the third straight month in October, marking the largest decline this year for the nation's biggest developer as government measures continued to cool the market.
The fall came as the outlook for the Chinese property market sours due to policies like tighter bank credit and limits on home purchases, implemented by Beijing in an effort to fulfill a pledge to make housing more affordable.
The "tremendous change in the market environment will inevitably affect Vanke's sales," Tan Huajie, the company's board secretary, said in a statement.
Vanke's property sales in October fell 33% from a year earlier to 10.34 billion yuan ($1.63 billion). The declines in September and August were 12% and 12.6%, respectively. Sales also fell 17.3% in October from September, according to calculations by Dow Jones Newswires.
The company is China's biggest in terms of market share.
"Be it on-year or on-month, sales during the 'golden September' and 'silver October' months had significantly slowed," the statement said. September and October are typically a peak time for housing sales.
Sales in China's major cities have declined in recent months after regulators introduced tightening measures, such as higher mortgage down payments and limits on the number of homes people can buy, to stem speculation and prevent a price bubble.
In terms of floor area, Vanke said its October property sales declined 23% to 1.004 million square meters. Sales were 7% lower than in September, according to calculations by Dow Jones Newswires.
"In the short term, the banks' tightened credit to first-time homebuyers have affected the end-users' purchasing ability, but the trend of end-users being the dominant segment of the market will not change," Mr. Tan's statement added.
News of the decline in Vanke's sales comes after Chinese Premier Wen Jiabao said on Saturday that the country should continue with measures to rein in the market and that local governments should strictly carry out existing policies to achieve a reasonable correction in prices.
In a sign of the political pressure China's property developers face, a southern city this week announced extraordinary restrictions on residential real-estate deals, including a price cap.
Zhuhai, an industrial city adjacent to Macau, said Tuesday it will permit transactions for new apartments priced no higher than 11,285 yuan a square meter. That is a fraction of the value of top-end apartments there and in major cities. The temporary price-control policy also includes limits on the number of apartments families can purchase, as well as measures to restrict buying by nonresidents.
Source: ESTHER FUNG