The value of new home purchases in China rose at a slower pace in the first four months with home seekers feeling less panicky in April compared to a hectic March. Sales of new residential properties, excluding government-subsidized affordable housing, jumped 65.2% from a year earlier to CNY1.69 trillion in the first four months, compared with the 69% annual growth registered in the first quarter. By volume, new home purchases climbed 41.1% to 268 million square meters during the four months, slightly down from the first quarter’s 41.2% growth rate. “Panic buying and selling began to cool down, with markets, particularly in big cities, seeing signs of stabilizing,” said Lu Qilin, a Shanghai Deovolente Realty Co researcher. In April, new home sales fell to CNY494.6 billion from CNY569.4 billion in March, while they declined to 79.3 million sq m from 94 million sq m in March, according to the National Bureau of Statistics (NBS). The Chinese government rolled out an array of measures on March 1 in its latest bid to tighten controls on the property market amid expectations of rising housing prices. A 20% tax on capital gains triggered a wave of selling and buying, the Shanghai Daily reports.

China’s grade A office rent is under pressure this year because of its already high base, weakening demand and rising supply in some cities. Beijing grade A office rents edged downward for the first time in three years, as demand slowed, according to a report by Jones Lang LaSalle (JLL). Rents in the overall market edged down 2% quarter-on-quarter in the first quarter to CNY337 per square meter per month, the first decline since the third quarter of 2009. The drop was more pronounced in the central business district (down 3.7% quarter-on-quarter), where resistance to high rents was more acute, although mild rental growth remained in place in submarkets where upcoming lease expiries are less of a concern. “Some tenants are reviewing their office space requirements given the huge rental growth witnessed in recent years,” said Eric Hirsch at JLL in Beijing, adding that “the chances of seeing further rental compression in the next one to two quarters are high.” According to Savills, although the city-wide vacancy rate is expected to level out at 3% by the end of 2013, the lowest level in the past 15 years, rents could fall by roughly 2% to 3%, as tenants continue to relocate to non-prime locations or are forced to squeeze their office space in prime locations because of deteriorating affordability, making it hard for landlords to apply rental increments. Grade A office rents in Beijing reached CNY318.8 per sq m per month by the end of the first quarter, with quarter-on-quarter growth constrained to just 0.4%. Overall rents in Shanghai’s grade A office market remained flat at CNY8.9 per sq m per day this quarter. Pudong’s grade A office rents exceeded Puxi rents for the first time since the third quarter of 2010, according to JLL. Rents continued to grow steadily in Pudong this quarter, rising by 1.3% quarter-on-quarter, but in Puxi, rents declined slightly by 0.3%. Pan Shiyi, Chairman of property developer SOHO China, said there is no bubble in the commercial property market in Beijing and Shanghai yet, but there are rising risks in second-tier cities with high vacancy rates, such as Chongqing and Xian. According to CBRE, construction of 40.8 million square meters of office space will be completed in the next four years across China’s 14 major cities, fueling worries about oversupply in some second-tier cities. Between 2013 and 2016, the total stock of quality office space in the 14 major cities will increase 80%, or 40.8 million sq m, the China Daily reports.

China Vanke has posted a significant drop in April revenue from March, in a clear sign that the government’s efforts at curbing housing prices have started to affect major developers. Its revenue fell 18.55% month-on-month to CNY12.38 billion in April, it revealed in a filing to the Shenzhen Stock Exchange. The figures are still positive on a yearly basis. The company sold 1.1 million square meters of residential floor space during the month, a 44.3% rise on April 2011, while its CNY12.38 billion April revenue represents a 66.39% year-on-year increase. Vanke sold 1.27 million sq m of space and generated CNY15.2 billion of revenue in March, a 26-month high. Ning Jingbian, Analyst with China International Capital Corp (CICC), said he expects Vanke to post CNY165 billion in annual sales revenue, against CNY141.2 billion in 2012. “The company has completed 26% of its yearly target in the first quarter, which is better than its average rate of 21% over the last five years,” Ning said.

Hong Kong-listed Hopson Development Holdings reported sales surged 51% year-on-year to CNY3.5 billion from January to April, but its sales in April also declined 20% from March. Guangzhou R&F Properties remains the only listed property developer to achieve month-on-month growth in revenue in April. The Hong Kong-listed company recorded CNY3.7 billion in April revenue, a 28.5% growth year-on-year, against CNY3.4 billion of sales in March. But despite the April sales dips, developers remain confident and are still buying land plots, said Su Xuejing, Industrial Analyst with China Securities. Land sales also declined in April, but are expected to pick up in May. The China Index Academy said that 635 land plots were traded in 300 cities in April, a drop of 18% compared with March, but a 13% rise year-on-year. Total traded space across the 300 cities declined 21% month-on-month, but edged up 3% year-on-year. The average land trading price for residential floor space grew 5% month-on-month to CNY1,062 per sq m nationwide, but surged 32% year-on-year. Residential land transactions soared by 2,096% in Hangzhou, 381% in Beijing and 133% in Shanghai, the China Daily reports.

Leading developers were out in force at the four-day real estate fair at the Shanghai Exhibition Center. Medium to low-end projects in the city’s outlying areas were the main attraction. China Vanke and Gemdale, both absent from a similar fair at the same venue in mid March, joined the likes of Greenland, Poly Real Estate, Pengxin, China Merchants, OCT Real Estate and Country Garden in the display of some 500 real estate developments, with about 60% of them local projects. “The real estate fair held around the Labor Day holiday is usually more popular among developers than the one held in March because buying sentiment is often stronger in May,” said Sky Xue, Analyst with the China Real Estate Information Corp. Prospective buyers were worried about rising prices. An online survey before the fair by real estate website Soufun.com found that more than 55% of respondents thought home prices in Shanghai would continue to climb steadily despite current property curbs, while 24% expected little change. About 70% of the respondents said they planned to enter into a deal sometime this year.

House prices rallied for another month in April but at a slightly slower pace. The average price of new residential properties across 100 major Chinese cities rose 1% from March to CNY10,098 per square meter, the 11th straight month prices have risen, the China Index Academy said. March’s increase was 1.06%. Forty of the 76 cities that posted gains saw increases above 1%. Hengshui in Hebei province led last month’s gainers with a 3.7% rise. Twenty-four cities saw prices drop, with five retreating more than 1%. Jilin in Jilin province had the biggest drop of 2.09%. In the country’s 10 largest cities, the average price for a new home rose 1.31% to CNY17,023 per sq m in April, accelerating from March’s 1.25% growth. Beijing led with a 3.11% monthly gain, immediately followed by Guangzhou’s 2.41%. Shenzhen and Shanghai saw price gains of 1.94% and 0.19%, respectively. In Shanghai new home sales dropped by more than 40% last month compared to March, while the average price jumped 4.5% from a month earlier to CNY23,914 per sq m. On the supply side, nearly 840,000 sq m of new houses were released to the local market last month, compared to 1.33 million sq m in March. “Sales have outnumbered supply for seven consecutive months in Shanghai, continuously dragging inventory down, particularly in the medium to low-end segment which have included the best-selling products in the market as tightening measures stay in place,” said Huang Zhijian, Chief Analyst with Uwin. If that scenario remains unchanged, it is inevitable prices will rise, Huang said, as reported by the Shanghai Daily.