A Steady and Strong October in ChinaOwing to dismal performance in third-tier cities, national home sales in October dropped nearly 7% m-o-m to 92,076,000 square meters, while total sale value totaled RMB 504 billion, down 6.8% m-o-m. Nonetheless, market sentiment continues to pick up in first-tier cities, with home sales and sale value grew 4.7% m-o-m and 5.2% m-o-m respectively.

In term of prices, average home prices in October went up by slightly 0.21% m-o-m to RMB 5,470 per square meter. Of which, toptier cities grew an average of 0.47% m-o-m to RMB 15,647 per square meter, while that in second- and third-tier cities recorded a -1.57% and a 2.97% m-o-m changes, to RMB 6,895 and RMB 6,075 per square meter, respectively. According to Government’s data, 35 cities, out of 70, recorded growths in home prices in October, up from 31 cities in September. 17 cities saw home prices falling, compared with 22 in the previous month.

The outlook for the property markets in firsttier cities has turned more bullish in October despite the weaker-than-expected sales performance during the traditional hot season – “Golden September and Silver October”. Developers, relieved from financial pressure, are becoming more aggressive in buying up land plots in the fourth quarter to replenish their land banks for future development. According to media report, over six million square meters of land have been sold so far in the fourth quarter, involving a total value of nearly RMB 16.6 billion. Stimulated by the buying spree in the land market, land prices in 10 major cities rose to an average of RMB 2,320 per square meter in October, 30% higher than that in September.

Another indication of the improving confidence among developers is the rising real estate investment, which edged up by 15.5% y-o-y in October to RMB 658 billion, compared with September’s 14.2%. In term of floor space, newly started construction fell 8.5% in the January to October period, easing from the 8.6% decline recorded in the January to September period.