Chinese land sales down 50% in the year

From a CREIS report, nationally, land sales in Q3 were 415.9 billion yuan, about equal to Q2, down nearly 50% yoy. Residential sales are down more than commercial. September land sales are down 70% yoy.

The chart from the report below shows cumulative homes sales through the end of Q3, 10 major cities. Yellow line shows the change from last year. On the bright side, the report also shows many cities have seen sales volume pick up in the last week, ahead of the National Day week-long holiday. Still down yoy, but way up from the previous week.

The People’s Bank of China said that purchasers of second homes could now be considered first-time home buyers, giving them access to lower down payments and mortgage rates. To qualify, the home buyers have to pay off any existing mortgage debt from their first purposes.

……The PBOC said home buyers who paid off their prior mortgages can now be considered first-home buyers and can enjoy down payment rates of 30%. Previously such home buyers would either not qualify for a housing loan at all or have to pay a minimum 60% down payment. Banks could also offer as much as a 30% discount on benchmark rates for mortgages, the statement added.

The big news isn’t the first time home buyer rule, it is that banks can again discount mortgages up to 30%. The big question is will they? The evidence to this point says no.

The WSJ also got a sneak peak at the results of CREIS 100 city survey: prices dropped 0.92% month-on-month in September, the biggest drop in the 4-year history of CREIS data.