Realty data shares hit rough patch amid sales downturn

Updated: 2014-06-14 07:25

By Gao Changxin in Shanghai (China Daily)

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Shares of China's three leading property information providers plunged in the US on Friday, underscoring the increasingly harsh business environment amid a weakening property market.

Soufun Holdings Ltd, China's biggest real-estate information website, sank 17 percent on the New York Stock Exchange, the most since 2011. E-House China Holdings Ltd, a Shanghai-based property brokerage, dropped 5 percent. Leju Holdings Ltd, an online brokerage, sank 6.4 percent.

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Soufun's retreat comes after the Beijing-based company announced a 40 percent discount on the fees that it charges agencies for listing property information. According to analysts, the discount and other promotions will cost Soufun up to 500 million yuan ($80.53 million). The discount came after nine real-estate brokerages in the city of Hangzhou, which account for around 80 percent of the local brokerage market, stopped putting information on Soufun last month, in a bid to get Soufun to reduce the rates.

China's property market has been losing steam for most of this year. The National Bureau of Statistics said on Friday that property sales dropped 8.5 percent in the first five months of the year from the same period last year. During the period under review, home sales declined by 10.2 percent, it said.

Investment in property construction kept growing in the first five months of the year, but growth is decelerating. According to the NBS, 3.07 trillion yuan was invested in the first five months, up 14.7 percent year-on-year. However, the rate is 1.7 percentage points lower than the 16.4 percent growth in the January-April period.

Against this backdrop, many home buyers are taking a wait-and-see approach after years of price increases. That is hurting the business for companies such as Soufun, whose profits mainly come from brokerages, analysts said.

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