There are also signs that the property market is also cooling in the rest of China. New home prices in many big cities were the same in July as they were in June, according to the latest figures from the National Bureau of Statistics.
Of the 70 major sample cities, property prices fell in 14, and were unchanged in 17, when measured against June's figures, according to the NBS.
‘The figures clearly point to a falling trend in property prices,’ said Zhang Dawei, chief researcher with Centaline Group.
As the tightening measures continue and restrictions on the number of purchases take effect, experts believe that prices will continue dropping in the coming months. Chen Sheng, vice president of the China Index Academy said that both developers and buyers are adopting a wait and see attitude but it is clear that government curbs will continue and may even become tougher.
The Ministry of Housing and Urban-Rural Development has announced restrictions on buying in second and third tier cities.
The over hot property market in Hong Kong may be cooling after it was reported that a luxury residential site was sold well under market expectations at the latest government land auction.
The 23,000 square meter site near the outskirts of Hong Kong sold for HK$5.5 billion (S$855 million), well below the HK$7.1 billion to HK$8.25 billion range forecast.
The site was sold to Kerry Properties and Sino Land. Its executive director Ho Shut Kan told reporters after the auction that the land was bought at a ‘very reasonable price’, and said he remained positive about the outlook for the property market.
Analysts said the global stock market sell off sparked by fears of a worsening debt crisis in Europe and the historic downgrade of United States debt by Standard & Poor’s kept developers on the sidelines.
‘It reflects that developers are taking a cautious stance towards investment, in particular, after the plunge in the stock market,’ said Kingsway Group head of research Steve Chow.
Property prices in Hong Kong, famous for its sky high rents, have surged over the last few years due to record low interest rates and a flood of wealthy buyers from mainland China.
The government has been trying to control ever rising prices, a major headache, amid growing disquiet from the seven million strong population over the rocketing cost of owning a home.
In June, Financial Secretary John Tsang said risks for property buyers in the territory were ‘higher now than ever’ as he announced new cooling measures.
