A salesman introduces a property project in Wuhan, Hubei Province. (Photo by Miao Jian/For China Daily)
The property market on the Chinese mainland cooled off in May after a torrid performance earlier in the year, due to increased regulatory intervention, experts said.
Zhang Dawei, chief analyst of property consultancy Centaline, said May witnessed a calm market and the trend seems to have continued during the three-day Dragon Boat holiday this month.
"The overall traded volume in May in first and second-tier cities dropped by 2 percent compared to April," Zhang said.
Despite it being a traditionally busy time for the property market, the reaction from house buyers in the country was not as fervid during the three-day holiday as the enthusiasm in March and April did not spill over into May.
Data from Centaline Property showed the size of newly built property in Shanghai during May fell by 37.9 percent to 687,000 square meters compared to April. It was the second time so far in 2019 that Shanghai has experienced such a fall since February.
The data showed that in the first two days of Dragon Boat festivities, only four newly built properties were sold in Beijing, down by half from the same period last year.
The pre-owned property sector also cooled off.
The Beijing Municipal Commission of Housing and Urban-Rural Development said 13,764 properties sold were recorded to their office, a 4.7 percent drop compared to April and a 24 percent decline from year-ago figures. Most major cities saw a cooling property market in May and during the Dragon Boat holidays.
A few cities such as Wuxi in Jiangsu province defied the trend. The city sold 667 properties during the three-day break, the local bureau's data said.
Property consultancy E-house China R&D Institute said in a report released on June 6 that 40 major cities in China saw a 3 percent decline for the month of May in the number of newly built property sold.
The cooling market was because of regulatory policies which took effect in April to curb an overheating market in the spring, the experts explained.
"Since the second half of April, some cities have again tightened their house purchasing restrictions," said Zhang. "Also, supplies of property in the market in May have shrank, such as Shanghai, as the available size supplied to the market was reduced by 37.9 percent from April."
Centaline's data showed that 41 regulatory interventions were made nationwide in May.
The Ministry of Housing and Urban-Rural Development rang the alarm bells for the cities of Foshan, Suzhou, Dalian and Nanning in May, after their property prices soared compared to the previous months.
Nanning's number of properties sold during the holiday fell by 56.75 percent compared to the same period last year, the local bureau's data said. Foshan saw a 70 percent drop in newly built property compared to those seen in the last Dragon Boat Festival.
E-House researcher Shen Xin predicted that regulatory factors will mean that trade property volume will keep shrinking in the 40 major cities of China in the first half of 2019 and the trend in the second half of the year will likely continue.
"The first-tier cities have seen two years of a calm market, thus the number is likely to bounce back in the future. But the second-tier ones in East China are expected to see further cooling," Shen added.