(Yicai) Aug. 1 -- New home sales in China fell again last month, but at a significantly slower pace than earlier in the year year, after real estate market policies were relaxed in May.

The value of new homes sold by the top 100 developers fell 19.7 percent in July from a year ago to CNY279.1 billion (USD38.6 billion), according to data from CRIC Research Center. Sales fell 16.7 percent in June. The declines in previous months were in the order of 30 percent to 40 percent.

On May 17, the central bank abolished the floor on mortgage rates, lowered the minimum downpayment to 15 percent on first homes and 25 percent on second homes, and cut individual housing provident fund rates by 0.25 percentage point, with major Chinese cities following suit. In addition, home trade-in schemes and other initiatives have been gradually implemented.

Only seven of the leading 30 builders, five of them state owned, increased their sales in July from a year earlier, according to think tank EH Consulting.

Struggling developers that have defaulted their debts were still under pressure. For example, sales at Country Garden Holdings and Sunac China Holdings plunged more than 70 percent to merely CNY5 billion (USD690.6 million) each.

In the first seven months of the year, the 100 largest builders sold CNY2.1 trillion (USD290.4 billion) of new homes, down nearly 38 percent from the same period of last year and 2 points slower than in the first six months, the CRIC Research Institute’s figures showed.

Just six of the 100 reported sales of more than CNY100 billion each in seven months ended yesterday, compared with 10 a year earlier, according to EH Consulting. Only 45 had sales of over CNY10 billion (USD1.4 billion), versus 77 in the same period last year.

Pre-Owned Home Sales

Unlike the market for new properties, second-hand house transactions in first-tier cities were solid. 

Some 14,560 pre-owned homes were sold in Beijing in the first 30 days of July, up over 58 percent on an annual basis, according to official statistics. The figure likely exceeded 15,000 for the entire month, the highest since March last year. Shanghai’s second-hand home sales totaled 19,745 between July 1 and 30, after doubling to about 26,000 in June.

The rapid increase in pre-owned home sales in Shanghai in June has somewhat impacted July’s performance, Lu Wenxi, market analyst at Shanghai Centaline Property, told Yicai. Last month’s total figure will likely exceed 20,000 units, based on the average daily transactions, Lu noted.

In Guangzhou, 10,034 lived-in homes were sold last month, down 4 percent from June, according to the latest statistics from the Guangzhou Association of Real Estate Agents. However, last month was one of only five with sales above 10,000 since May 2021.

Sales in Shenzhen totaled 4,851 in the first four weeks of July, up 62 percent from a year ago, according to data from the Shenzhen Real Estate Intermediary Association.

Editors: Tang Shihua, Futura Costaglione