New home prices in Guangzhou have recovered from last year's contraction and risen well above the average price in the last property boom year of 2007.

By staff reporter Wang Zhen

(BOCVIP.COM) New home sales in this southern Chinese city hit 7.7 million square meters in the first nine months of 2009, matching the full-year sales level achieved in the last property boom year of 2007, according to official statistics.

A total of 909,400 square meters were sold in September, down 46.2 percent from a month earlier, with prices growing five percent to 9,777 yuan per square meter, the Guangzhou Municipal Bureau of Land Resources and Housing Management said in a statement on Oct. 14.

Growth momentum in the local property market appears to be strong, Li Wenjiang, chief analyst at consultancy Hopefluent told Caijing, adding that the sales decline in September from August is the result of a statistical distortion caused by the introduction of a new compilation system for new home transactions in July.

The local authority counted many July sales in August, inflating the latter month's totals, Li said.
New home prices in Guangzhou have fully recovered from last year's contraction and have risen well above the average of 8,599 yuan per square meter in 2007, said Li.
Housing prices are unlikely to fall in the short term, giving property developers less incentive to promote sales, Li added.

Nevertheless, some aspects of the market are weaker on a year-earlier basis, according to Centaline China, another property consultancy.

About 2,000 new apartments were sold in the six districts in the city center during the national day holidays from Oct.1-8, a fifth of the number sold during the same period last year, Centaline said on Oct 12.

Average buyers are finding themselves increasingly priced out of the market while investors have become more cautious because of fears of an emerging bubble, Centaline noted.

1 yuan = 14 U.S. cents

Full article in Chinese: http://www.bocvip.com/2009-10-15/110283114.html