September and October are traditionally the peak season for Chinese real estate market. Last year, the peak season was not all that golden.
This year, the real estate market came back to life in the past few months. However, September does not seem to have had a great start. Since the start of the month, transaction volumes in 54 cities fell by 4.5% compared to the first 20 days of August, according to Chinese Securities Journal, citing figures from Centaline.
The relatively slow start for the peak season could probably be attributed to the fact the home prices curbs remain firmly in-place, particularly after home prices rose in the past few months. In terms of credit, after two rate cuts (which triggered the recent rebound), credit is not being eased any further. Meanwhile, real estate developers are putting up less homes for sales.
I am not sure if the slowing in new home sales is a sure sign that the rebound is over, but I certainly believe that the recent rebound is unsustainable. The resilience of the market has partly contributed to the government’s slow reaction to the economic slowdown.