(Yicai Global) July 24 -- Sales of home air conditioners in China dropped 1.4 percent in the first half from a year earlier mainly because of a softer real estate sector, according to new figures.

Air con sales stood at CNY113.7 billion (USD16.5 billion) in the first six months of the year, market monitor All View Cloud said yesterday, while unit shipments rose 1.5 percent to 33.7 million.

Last year's slowdown in the property market has curtailed demand for air conditioners this year, said Wang Yongtao, a senior researcher at All View Cloud. Consumers in urban areas were also reluctant to buy new models, though new retail channels in third- and fourth-tier cities, counties and villages is helping to unlock rural demand, he added.

Authorities across the country have brought in tough residential property market rules to rein in borrowing and curb potential market bubbles. Fewer new homes being built leads to a decline in demand for air cons.

Data provided to Yicai Global by another research firm, which declined to be named, also showed that in June, production and shipments of home air cons fell as the end of the peak manufacturing season approached. Output slumped almost 11 percent to 14.3 million, while shipments slid 5.1 percent to 15.2 million. Domestic sales were off 7.8 percent at 10.3 million, while exports rose 1.3 percent to 4.9 million.

Air-con makers are mainly focused on device renewals this year as the number of new properties being delivered is not very large, an executive in charge of a showroom of Gree Electric Appliances in south China told Yicai Global. Gree is the world's biggest producer of home air conditioners.

Midea Group, China's other leading maker, has narrowed its gap on Gree in the offline market through price cuts and promotions and the company has already topped the list for online shipments, the executive said, adding that Gree chose to counter its rival by making high-end products, meaning that its average sales price rose in the first half. This caused a dip in both online and offline market share.

Gree will likely adjust its prices in the second half to hit its annual sales target, Wang said. Manufacturers have to slim inventory of some low-end devices before the year-end when regulators will hike energy-efficiency standards, he added. The possibility of prices falling is, therefore, quite high in the second half.

Wang forecasts that the domestic air-con market will rebound a little in the second half, while remaining about the same size as last year.

Editor: Tang Shihua