BEIJING New property curbs in China's capital unveiled in March have started to cool the red-hot housing market, but the frothy market will take some time to stabilize, the Beijing municipal government said.
Beijing, a bellwether of national policy direction, is on the frontline as China takes on speculators and tries to tame home prices, with new curbs last month as prices and sales picked up again, shrugging off measures taken late last year.
The new measures included raising the minimum downpayment on a second home to 60 percent to 80 percent, from 50 percent to 70 percent, depending on home types.
Online transaction volumes fell 16.7 percent in the 10 days after the new curbs adopted on March 18, versus the previous 10 days, the Beijing government said on Wednesday.
Property sales by floor area also dropped 15.4 percent in the first quarter from a year ago, it said, or 5 percentage points quicker than in the first two months of the year.
The city government also singled out the resale market, stressing it has cooled significantly.
"With demand dropping, it's possible (Beijing) housing prices, especially in the resale market, may drop," a city government spokeswoman told a news conference, a post on the government website showed.
Prices in Beijing's resale market surged 2.2 percent in March on a monthly basis, data from the National Bureau of Statistics showed.
New home prices rose 0.4 percent in Beijing in March from the previous month, after flatlining in the first two months of the year. Beijing home prices surged 19 percent from a year earlier.
But the spokeswoman conceded buyers might adopt a wait-and-see attitude as policy adjustments take time to sink in.
"The impact of the new policies will become increasingly visible in April or in the even longer term," she said.
Sales by floor area of new units dropped 22 percent in the first half of April from a year ago in the 50 major Chinese cities monitored by real estate consultancy E-house China R&D Institute. The fall was 4 percent versus the previous 15 days.
Sales dropped the most in tier-1 cities, which showed a 12 percent drop on a monthly basis, the Shanghai-based consultancy said, while tier-2 and tier-3 cities had smaller respective falls of 2 percent and 4 percent.
"The drop in sales showed the measures are effective," it said. But it also said 25 of the 50 cities had price gains in the first half of April over the corresponding March period.
The consultancy estimates sales in the 50 cities will continue to fall by about 10 percent in April, from a month ago.
The housing boom has been a key driver of China's stronger-than-expected economic performance in recent months, but analysts believe it may also pose the single biggest risk to growth this year.
Local governments are adopting ever tougher measures to rein in prices, which are expected to eventually slow real estate investment and construction.
(Reporting by Yawen Chen and Nicholas Heath; Editing by Clarence Fernandez)