(Yicai Global) March 5 -- New house sales in China's southern city of Shenzhen hit their lowest level for 10 years last month affected by the Chinese New Year holiday, while prices reached their 16th consecutive month of contraction.
There were 1,260 new houses sold in the city in February, down 77.6 percent annually, hitting a new low not seen since February 2008, data from Shenzhen L+ Research Institute shows.
The average sales price of new residential properties in the city, located in Guangdong province, continued to decline slightly, down CNY49 per square meter from the previous month to CNY54,200 (USD8,600) per square meter.
Sales price decline started after the introduction of property market control policies in October 2016. Since then, the average price of new homes in Shenzhen has remained at CNY55,000 per square meter per month, but has fallen by dozens of yuan per square meter each month.
Many luxury property developers in Shenzhen have postponed transactions, transferred to long-term rentals, or cut prices due to the policy, leading to squeezed profits or even losses.
The city's second-hand housing market is free from price restrictions and better reflects real market demand compared to new properties.
The transaction volume of second-hand houses fell in February with 3,133 deals made, half of the figure seen in January. The average transaction price was CNY58,600 per square meter, up 0.9 percent from last month, data from Shenzhen Centaline shows.
Second-hand housing prices rose marginally in the month. Overall, the volume of both first- and second-hand residential properties in Shenzhen has fallen drastically and transaction price was largely stable.