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Property prices fell sharply in China in 2008

In an extraordinary move several government ministries have joined with the central bank and housing groups to urge developers to drop their prices to boost the ailing property sector.

The latest official figures show that property prices in Hong Kong fell sharply in 2008. The value of sales of all types of building units dropped by more than a fifth, government data from The Land Registry showed.

It recorded 113,298 agreements last year compared with 145,691 in 2007. The total value of the deals amounted to $53 billion, down 21.4%.

The total number of sale and purchase agreements for residential units rose 44.2% to 4,706 in December from November, but the December number was down 65% from the same period a year ago.

Meanwhile China Vanke, the country's biggest listed property developer, saw its real estate sales fall about 9% in 2008, it confirmed.

Vanke sold 5.57 million square metres of space in 2008, down 9.2% from 2007, while in value terms, sales fell 8.6%%.

China's real estate market saw a steady decline in prices and sales volume throughout 2008, battered by an economic slowdown sparked by the global financial crisis.

Meanwhile four government agencies are urging developers to cut property prices to make them more affordable. The housing ministry, finance ministry, central bank and the National Development and Reform Commission said realistic prices are needed to boost housing sales.

In a statement they said they state that the construction industry ought to support the weakening economy and avert further job losses. 'Property prices are still not affordable for ordinary people,' the statement said.