China’s biggest developers slowed home sales toward the end of 2011, bracing for the worst property market in three years as the government vows to keep real-estate curbs according to Bloomberg

Contract sales, or sales booked before apartments are completed, dropped 30 percent last month at China Vanke Co. (000002), as the country’s biggest developer by market value offered fewer homes from November. Evergrande Real Estate Group Ltd. (3333), the second-biggest Chinese developer by revenue, said sales in November and December were the lowest for the year.

Property sales at China Vanke Co. fell for the third straight month in October, marking the largest decline this year for the nation's biggest developer as government measures continued to cool the market.

The fall came as the outlook for the Chinese property market sours due to policies like tighter bank credit and limits on home purchases, implemented by Beijing in an effort to fulfill a pledge to make housing more affordable.

The "tremendous change in the market environment will inevitably affect Vanke's sales," Tan Huajie, the company's board secretary, said in a statement.

Vanke's property sales in October fell 33% from a year earlier to 10.34 billion yuan ($1.63 billion). The declines in September and August were 12% and 12.6%, respectively. Sales also fell 17.3% in October from September, according to calculations by Dow Jones Newswires.

One of our regular contributers Vernon Martin, principal of American Property Research recently completed another Chinese mall tour to further examine the Chinese luxury mall construction frenzy and has shared his findings with

The Longemont Shopping Mall is now open and a beautiful sight to behold. The only things lacking are tenants and shoppers and western-style toilets.

Miscount of tenants at Longemont Shopping Mall
Although the PCRT web site advertises Longemont Mall as having 800 tenants, the number of open stores seems to be less than 200.

Many multi-level Asian malls also have their top floor or floors devoted exclusively to restaurants, and this can be one of the busiest sections of a mall in the evening. Not so here. Longemont’s 7th floor is also devoted to restaurants, plus an ice skating rink, but it appears that only half of the restaurant space has been rented out.

Developers starting to default
The recent announcement by construction equipment manufacturer Kohmatsu that it was not getting paid by Chinese developers presents further evidence of financial distress among Chinese developers.

This does not bode well for a Furniture Mall. Moreover, the first major Chinese real estate developer default has been Dalian Rightway, based in nearby Dalian, another city in the same province of Liaoning.

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China Banking Regulatory Commission cracking down
The efforts by the China Banking Regulatory Commission, which haven't been publicly announced, add pressure to an industry that already was struggling with other government attempts to take some of the air out of the country's property bubble. How those efforts proceed, and whether the credit squeeze contributes to a significant decline in construction, has big implications for overall growth in the world's second-largest economy, which has been a rare bright spot in an otherwise gloomy global outlook.