Beijing Home Sales Slump in Feb. Following Purchase Restriction

BEIJING, Mar. 2  -- Beijing saw sharp declines in home sales in February following the enacting of a group of measures to cool the housing market, local authorities said Tuesday.

The city reported sales of 3,436 new homes, down 70 percent from the sales figure in January, said Beijing's real estate transaction management website run by the municipal commission of housing and urban-rural development.

Existing home sales slumped 64.3 percent month on month to 8,376 units last month, the lowest volume in 25 months.

Apart from a series of cooling measures, Zhang Dawei, an analyst with the Centaline Property in Beijing, believed the fall in supply was also among the factors behind the sales slump.

Prices of more than 90 percent of housing projects remained stable last month, Zhang said. Centaline Property projects no large correction in housing prices in the city as supply remains at low levels in the first half of 2011, he said.

In the middle of last month, the Beijing municipal government moved to prohibit home purchases by non-local registered families who have no proof of social security or income tax payments in the city for five straight years. ( It also prohibited new home purchases by Beijing families who own two or more apartments, and non-Beijing registered families who own at least one apartment.

The latest efforts came on top of other tightening measures, including requiring higher down payments and lending rates and a ban on mortgage loans for third homes.