Much to their disappointment, real-estate developers in Shenzhen have found that the just-concluded week-long National Day holiday did not yield the bumper harvest of deals they had come to expect.

Potential homebuyers in Shenzhen took a wait-and-see approach in the face of a barrage of marketing incentives that included free home decorations, appliances and lucky draws.

Official statistics indicate that apartment sales actually dipped during the October 1-7 national holiday.

No more than 19 apartments were sold per day, and only four were sold on the least active day.

Huang Yiwen, deputy secretary-general of the Guangdong Provincial Real Estate Association, attributed the "abnormal" phenomenon to the impacts of the new mortgage loan policy that was released right before the National Day holiday and to homebuyers' expectations of more real estate-related macro-manipulation policies that will probably bring down the already sky-high housing prices in the city.

"The State released a new policy in late September to raise the down payment for property mortgage loans to 40 percent for those buying second apartments. Many potential buyers hope the measure will slow the rapid growth in prices," he said.

"Many more bet the State will churn out more policies to rein in the rampant growth of housing prices in the nation's big cities, so they are waiting to see what happens."

Wang Shuquan, general manager of Miland Holdings (Shenzhen), said many Shenzhen residents were hoping to buy apartments in Hong Kong, which had also dampened local sales.

"The price of housing in Shenzhen has risen to such an extent that some apartments in Shenzhen are more expensive than those in Hong Kong. And the rental return on Hong Kong properties is generally higher than those in Shenzhen," Wang said.

"Quite a few Shenzhen people are turning to property in Hong Kong to avoid the effects of possible new policies aimed at manipulating the real estate market on the mainland."

Wang said his firm had organized on-site visits to several premium properties for more than 200 Shenzhen people during the holiday. More than 10 percent of them said they were keen to buy.

"Many of the Shenzhen buyers had benefited handsomely from the housing price hike in the past couple of years," he said.

"I think many more of them will invest in properties in Hong Kong to avoid the local policy risks."

(China Daily October 9, 2007)