The seven-day Golden Week holiday used to be a busy time for developers, but not this time. Analysts expect the weakest October in recent memory and see developers offering more price cuts after sales in 31 cities, monitored by property consultancy CRIC, fell 27% year-on-year. The bearish sentiment is also taking its toll on property stocks. The Hang Seng Mainland Properties Index has fallen to its lowest level since August 2017 and is down about 17.5% from its recent peak on September 21. In Shenzhen, only 226 new homes were sold in the first week of October, down 49.3% from the same period a year ago. In Hangzhou, only 293 new homes were sold during Golden Week, the lowest since 2009, while in Nanjing, the figure was 154 – the lowest in the past seven years.

However, in Beijing and Shanghai, 235 and 645 units were sold for a year-on-year growth of 64.5% and 243% respectively. Lu Wenxi, Senior Analyst with Centaline Shanghai, said the anomaly in these two top cities can be attributed to the low comparison base last year, adding that the volume in Shanghai was the second lowest since 2012. “Price discounts in various cities have not buoyed up sales,” said Lu. “On the contrary, it will only cause people to be more cautious. Developers will only face more pressure to deplete inventory and offer further price cuts.”

Zhang Hongwei, Research Director of Shanghai-based property consultancy TopSur, agrees. “There will be more cases of price cuts in cities across China. Financing curbs on developers remains firmly in place, and developers race to achieve their annual sales target in the fourth quarter.” As home sales have slowed down significantly since August, developers have revved up marketing campaigns and cash discounts to lure buyers. However, massive price discounts of up to 30% in some cases have led to protests by angry buyers who paid the full price earlier. Protests took place at projects of Country Garden Holdings, China Vanke, China Evergrande, Longfor, Tahoe and Ronshine. Meanwhile, as developers show less interest in land acquisition, the average land price premium has fallen to 10% in the third quarter, from 30% a year ago, according to the China Index Academy, as reported by the South China Morning Post.