(Yicai Global) Nov. 1 -- Property sales at the China’s top 100 developers plunged more than 28 percent year on year during the last two months, the traditional peak season, according to data released by market agency China Real Estate Information (CRIC) yesterday.

Although some real estate developers recorded positive performances during the week-long National Day holiday that started on Oct. 1, but sales lost momentum quickly afterward, Yicai Global learned.

“With good sales during the National Day holiday, we had anticipated a sound future market,” an industry insider at a top 30 real estate company in China said. “But sales during the holiday turned out to be almost all we got in October.”

“We recorded CNY5 billion (USD685 million) of sales value during the National Day holiday, but it accounted half of the total sales in October,” said a source at a developer in eastern China.

After experiencing a short lived month on month sale growth in September, the Top 100 developer’s overall sale went down 2.6 percent in October from September, which is a larger decline than the average monthly drop in recent years, according to the CRIC. The October sale also sank 28.4 percent from a year ago, three percentage points more than that of September. The cumulative sales in the first ten months fell by 44 percent from a year ago.

“Sales will remain sluggish, as the real estate market may not rebound until at least the middle of next year,” a marketing staffer at a Fujian province-based property developer predicted to Yicai Global.

The poor demand have forced developers start to cut prices to scramble for customers. “We had to follow when other developers reduced prices, or we would not have been able to sell any houses,” a source at a top 10 developer in China told Yicai Global.

By October, New home prices in 100 cities has dropped for four straight months, while second-hand home prices has also plunged for six months in a row, according to the China Real Estate Index System’s China Residential House Price Index HPI-100. New home prices in 54 cities and second-hand home prices in 75 cities declined in October from September.

But several industry insiders told Yicai Global that It is impossible to stimulate the market significantly again by promotions alone, as real demand is shrinking.

In Shenzhen, For example, high income professions such as software programmers were used to be an important purchasing power in the local housing market, but that is not the case anymore, as the demand from these groups are shrinking, so goes out the overall market, an insider with a developer in southern China told Yicai Global.

Data from China’s central bank shows that both the income and the housing price expectations are at their respective lowest points in nearly 20 years, a fixed income analyst tracking the real estate sector told Yicai Global, so the recovery of the property market fundamentals will remain slow until the government introduces further supportive policies.

Editors: Tang Shihua, Futura Costaglione