SouFun slides on pricing worries

86Research observes SouFun (SFUN -4.8%) hasn't raised its listing prices this year, and thinks real estate agencies might force the company to slash prices.

Also: China Real Estate System Index thinks Chinese home prices just fell M/M for the first time since June 2012, declining 0.3% in May. On a Y/Y basis, prices still rose 7.8%, though that's down from April's 9.1% clip and March's 10%.

E-House (EJ -1.6%) is also off. Subsidiary Leju (LEJU -0.9%) is down modestly.

Previous: Nomura worried about Chinese real estate bust

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Comments (2)
  • depueman
    , contributor
    Comments (266) | Send Message
    EJ is being dragged down also. In the CC barely over a week ago they said this has NOTHING TO DO WITH THEIR BUSINESS AS THEY EXPLAIN. Plus, SFUN already addressed the possibility a month ago in their CC so this is old news. My gosh.................For Leju’s online business we don’t charge buyer at a percentage of their purchase price. The business model there is that we charge potential home buyers a service fee and that’s usually a fixed RMB amount and then with that they are entitled to a certain discounts from the properties or products they purchase. Now for a particular project you can calculate and that transacts into certain percentage of the purchase price but then there are a couple of moving parts there. To give you an example if the product, it's of easy sell, it's a half-selling project maybe for the same dollar amount the home buyer pays us as service fee they get relatively a small discount but if a project it's a hard sell and the developer needs to make strong efforts to promote they maybe willing to offer a bigger discount. So exactly what the home buyers pays us in terms of the purchase price it's not something that weakness it. So this is a slightly different concept than E-House’s offline brokerage service.
    30 May 2014, 01:11 PM Reply Like
  • Tirusew
    , contributor
    Comments (18) | Send Message
    Thanks! Why was it confusing to many? The stock tanked today due to confusion.
    30 May 2014, 04:53 PM Reply Like
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