BEIJING, July 2 Chinese property consultant CRIC
is predicting that Chinese developers will likely to cut the
prices of about 1,100 new housing projects in 21 big cities to
lift flagging sales, underlining the pressures in China's
cooling real estate market.
The housing market is a major driver of investment in China,
with home-building said to support about 40 industries employing
millions of workers.
CRIC, which provides investment recommendations to home
buyers on a four-point scale that ranges from 'buy as soon as
possible' to 'wait and see', has downgraded its ratings for 27
percent of the 4,038 new housing projects that it tracks.
The developers of the 1,107 new housing projects are likely
to cut prices to boost slackening sales, CRIC said in a
statement. CRIC is a unit of real estate services firm E-House
"For these projects that have been downgraded, we think
their prices do not reflect the current market conditions," said
Ding Zuyu, co-president of E-House.
China's property market has lost momentum since late 2013,
with the latest data showing home prices fell 0.2 percent in May
That slippage has led other analysts to forecast a further
drop in China's new home prices in the third quarter as
developers come to accept deeper price cuts and adopt more
aggressive advertising and other strategies to meet 2014 sales
So far developers have resisted big price reductions.
CRIC's data showed it upgraded its investment rating for
only 3 percent of home projects, while its call on the remaining
69 percent of developments remained unchanged.
This is the first time CIRC is grading the investment appeal
of real estate projects. Its four recommendation ratings are
"buy as soon as possible", "buy", "buy with caution" and "wait
The property consultant did not say to what category the 21
percent of properties that were downgraded had been assigned.
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Eric