Construction in Fuzhou. Photo: Reuters/China Daily
Construction in Fuzhou. Photo: Reuters/China Daily

Home prices are relatively stable in the southeastern Chinese city of Fuzhou while sales have dropped significantly after further tightening measures, Xinhua state news agency reported on Tuesday, citing data from local property agencies.

Fuzhou, the capital city of Fujian province, has been one of the most overheated cities this year. Official data showed September home prices in Fuzhou soared 26% compared to a year ago.

The city introduced stricter policy measures during China’s National Day holiday week, including requiring higher down-payments.

Sales volume for new homes is estimated to have since dropped 80% month-on-month, while that for second-hand homes dropped around 60%, Xinhua said, citing data from multiple property agencies.

“According to reports from our sales offices, sales have all suffered obvious declines,” Cai Jun, general manager at Centaline in Fuzhou, was quoted as saying.

But prices have remained relatively stable, as developers who benefited from strong sales in the past have little incentive to lower prices.

“Previous experience showed that reducing the price doesn’t help sales much,” Xinhua quoted Wang Azhong, director at the real estate center of Fuzhou University, as saying.

“Instead, if you do so, people might be increasingly hesitant to buy.”