Mainland property stocks pressured as flat prices fall
Stephanie Tong
Mainland property stocks face increased downside risk as flat prices in China are expected to dive further, analysts say.
"Demand for housing is weakening," Hang Seng Bank (0011) economist Thomas Shik said yesterday. "Prospective homebuyers who expect further declines in property prices are likely to be more risk-averse. They may be reluctant to buy flats in the near term."
Credit Suisse said Shenzhen, Guangzhou and Beijing are likely to experience greater price-cut pressure compared to other cities, with their flat prices forecast to drop between 21 and 23 percent from June levels.
Meanwhile, the share prices of 12 mainland property plays slumped by an average 6 percent on the Hong Kong bourse yesterday after Credit Suisse issued the research report.
Sino-Ocean Land Holdings (3377) reported the biggest plunge, down 9.2 percent to close at HK$2.96.
"Mainland property plays will continue to be under pressure," said Sun Hung Kai Financial strategist Castor Pang Wai-sun.
"There has been concern that mainland developers' profitability will be affected by the slowdown in China's economic growth.
"In addition to Credit Suisse's downgrade on mainland property stocks, other investment banks may make a similar move."
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China - Housing 01 (May 08 - May 10)
Re: China - Properties
by winston » Wed Sep 10, 2008 8:23 am
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: China - Properties
by millionairemind » Thu Sep 11, 2008 4:30 pm
Real estate markets across China join general slump
By Keith Bradsher Published: September 10, 2008
GUANGZHOU, China: The United States, Britain, Spain and other countries suffering from real estate market downturns now have fresh company: China.
Starting here in southeastern China and now spreading north and west across the country, the number of homes changing hands has dropped precipitously. Faced with few buyers, sellers are starting to cut their prices for residential and commercial real estate.
Brokers describe price decreases of as little as 4 percent over the past year in Harbin in northeastern China, for example. But the volume of transactions there has plunged by two-thirds.
In some areas of southeastern China, where the number of transactions began falling earlier, prices have dropped by 10 percent to 40 percent.
"People are thinking more carefully and taking much longer before they decide to buy or not to buy property - the environment is more difficult these days," said Hwang Sha, a real estate broker in Xiamen in east-central China.
China's real estate downturn is occurring as exports are also slowing sharply when adjusted for inflation and calculated in yuan.
China's accumulating economic problems pose a challenge for the United States and the European Union. Worried about job losses, China pushed down the value of the yuan slightly against the dollar last month for the first time in 26 months, a step that would make Chinese exports more competitive at the risk of raising trade tensions with Washington and Brussels.
This downturn in property has led to what economists describe as a broader deceleration in China's rate of economic growth, although at nearly 10 percent it remains higher than in most countries. Fresh evidence of that economic slowdown emerged on Wednesday in a series of monthly economic statistics released by the Chinese government.
Growth slowed in imports and fixed-asset investments. Inflation dropped sharply at the consumer level, to 4.9 percent in August from 6.3 percent in July.
Weaknesses in China's real estate market do not yet appear to pose a threat to the financial system as severe as the problems unfolding in the United States. Chinese banks require down payments on mortgages of at least 30 percent, providing an ample cushion against losses. Foreclosures are rare. Many in China still pay cash for their homes, particularly in rural areas.
Leo Wah, a Chinese banking analyst for Moody's, said that Chinese banks could weather the current decline in real estate prices, but he cautioned that banks could face more challenges if economic troubles become more widespread. "We do not believe that it would cause a serious problem, but if property prices fall some more, it won't be the only sector that has problems," he said.
Real estate difficulties pose a dilemma for China's leaders because they coincide with a two-thirds drop in share prices on the Shanghai stock market since the market's high last October.
The most recent national data from the government show that the average price for all residential and commercial real estate was 7 percent higher in July than a year earlier. But real estate brokers across China say that within that period, prices peaked in various markets either at the end of last year or at various times this year, and are now sliding in many cities.
The stocks of real estate developers have plunged. China Vanke, the country's biggest publicly traded developer, reported Tuesday that its revenue had plummeted 35 percent in August from a year earlier.
Perhaps most serious is the emerging view, apparent on blogs and in interviews, that houses, like shares on the plummeting Shanghai stock market, are no longer a certain path to prosperity.
Lin Bin, a 48-year-old insurance saleswoman who lives here in Guangzhou, said she was still ahead on the 1,000-square-foot, or 93-square-meter, three-bedroom apartment she bought here in 2002. But she has lost two-thirds of the $4,400 she put into the stock market a year ago and worries that the housing market may be next.
"I'm not contemplating buying a second home as an investment because I hear that stock market and housing prices will continue to fall through next year," she said.
Part of the problem is a severe credit crunch. Through last spring, China's central bank repeatedly ratcheted up its requirements that Chinese commercial banks must deposit more reserves with it. The goal was to slow bank lending and control inflation.
The commercial banks have responded by continuing to lend to big corporate customers, most of them state-owned or at least state-controlled, while cutting back on other lending.
Central bank data show that total loans to households fell by a third from March to July this year. The bulk of these loans are mortgages, because Chinese car buyers continue to use mostly cash while personal loans are rare.
"It's collapsing, it's unbelievable, and most of it is from mortgages - I don't see how the housing sector is going at all," said Nicholas Lardy, a specialist in Chinese finance at the Peterson Institute for International Economics.
He added that the decline was so precipitous that it had to reflect weaker demand for housing, and not just regulatory restrictions on credit.
Increasing lending may be difficult now, and not just because of lackluster public interest in real estate. The central bank needs ever more reserves from commercial banks to buy dollars and prevent China's currency from rising against the U.S. dollar, so as to keep China's exports from slowing further.
The central bank spent one-seventh of China's entire economic output in the first half of this year to buy foreign currency.
China's trade surplus set a record of $28.7 billion in August, the government announced Wednesday. This was mainly because of an unexpected slowdown in the growth rate for imports. Slower growth of imports is a common sign of a weakening economy.
Assessing national trends in Chinese real estate is often difficult because of long lags in the data. The government releases annual data only for the value of all real estate sold or leased across the nation, while monthly data on prices come out with long delays. That makes it hard to pinpoint when the pace of transactions begins to slow, or the current level of prices.
Real estate brokers say that prices are generally holding up better for residential property in prime locations than in outlying areas, and that top-quality commercial buildings are faring better than older buildings.
Real estate difficulties are starting to affect the construction industry, although the skylines of Chinese cities remain dotted with cranes.
Ralph Gerson, the executive vice president of Guardian Industries, one of the world's largest glass-making companies, said that demand was rising less rapidly in China for the company's high-technology insulated glass for modern office buildings.
"It used to be booming, and now it's growing at a slower pace," he said.
Cities deep in China's interior appear to be the least affected by the current difficulties. Dan Yian, a real estate agent in Chongqing, said that the volume of housing transactions there had slowed by 20 percent to 30 percent so far this year. But prices have not yet fallen from a stable level of $730 a square meter, which works out to nearly $66,000 for a typical apartment of 90 square meters.
Export-dependent coastal cities in mainland China have had the steepest downturns in their real estate markets. Some of these problems are starting to have ripples in other Asian markets.
Freddy Wu, the chief executive of Hong Kong Property Services, said that his real estate agency had seen mainland investors default in recent months on a tenth of their purchases of Hong Kong apartments, forfeiting down payments.
"A lot of investors from China have their cash tied up in the mainland stock market and in mainland real estate, so they would rather take a loss now," instead of being required to sell mainland investments at a loss to come up with the cash to complete purchases in Hong Kong, he said.
By Keith Bradsher Published: September 10, 2008
GUANGZHOU, China: The United States, Britain, Spain and other countries suffering from real estate market downturns now have fresh company: China.
Starting here in southeastern China and now spreading north and west across the country, the number of homes changing hands has dropped precipitously. Faced with few buyers, sellers are starting to cut their prices for residential and commercial real estate.
Brokers describe price decreases of as little as 4 percent over the past year in Harbin in northeastern China, for example. But the volume of transactions there has plunged by two-thirds.
In some areas of southeastern China, where the number of transactions began falling earlier, prices have dropped by 10 percent to 40 percent.
"People are thinking more carefully and taking much longer before they decide to buy or not to buy property - the environment is more difficult these days," said Hwang Sha, a real estate broker in Xiamen in east-central China.
China's real estate downturn is occurring as exports are also slowing sharply when adjusted for inflation and calculated in yuan.
China's accumulating economic problems pose a challenge for the United States and the European Union. Worried about job losses, China pushed down the value of the yuan slightly against the dollar last month for the first time in 26 months, a step that would make Chinese exports more competitive at the risk of raising trade tensions with Washington and Brussels.
This downturn in property has led to what economists describe as a broader deceleration in China's rate of economic growth, although at nearly 10 percent it remains higher than in most countries. Fresh evidence of that economic slowdown emerged on Wednesday in a series of monthly economic statistics released by the Chinese government.
Growth slowed in imports and fixed-asset investments. Inflation dropped sharply at the consumer level, to 4.9 percent in August from 6.3 percent in July.
Weaknesses in China's real estate market do not yet appear to pose a threat to the financial system as severe as the problems unfolding in the United States. Chinese banks require down payments on mortgages of at least 30 percent, providing an ample cushion against losses. Foreclosures are rare. Many in China still pay cash for their homes, particularly in rural areas.
Leo Wah, a Chinese banking analyst for Moody's, said that Chinese banks could weather the current decline in real estate prices, but he cautioned that banks could face more challenges if economic troubles become more widespread. "We do not believe that it would cause a serious problem, but if property prices fall some more, it won't be the only sector that has problems," he said.
Real estate difficulties pose a dilemma for China's leaders because they coincide with a two-thirds drop in share prices on the Shanghai stock market since the market's high last October.
The most recent national data from the government show that the average price for all residential and commercial real estate was 7 percent higher in July than a year earlier. But real estate brokers across China say that within that period, prices peaked in various markets either at the end of last year or at various times this year, and are now sliding in many cities.
The stocks of real estate developers have plunged. China Vanke, the country's biggest publicly traded developer, reported Tuesday that its revenue had plummeted 35 percent in August from a year earlier.
Perhaps most serious is the emerging view, apparent on blogs and in interviews, that houses, like shares on the plummeting Shanghai stock market, are no longer a certain path to prosperity.
Lin Bin, a 48-year-old insurance saleswoman who lives here in Guangzhou, said she was still ahead on the 1,000-square-foot, or 93-square-meter, three-bedroom apartment she bought here in 2002. But she has lost two-thirds of the $4,400 she put into the stock market a year ago and worries that the housing market may be next.
"I'm not contemplating buying a second home as an investment because I hear that stock market and housing prices will continue to fall through next year," she said.
Part of the problem is a severe credit crunch. Through last spring, China's central bank repeatedly ratcheted up its requirements that Chinese commercial banks must deposit more reserves with it. The goal was to slow bank lending and control inflation.
The commercial banks have responded by continuing to lend to big corporate customers, most of them state-owned or at least state-controlled, while cutting back on other lending.
Central bank data show that total loans to households fell by a third from March to July this year. The bulk of these loans are mortgages, because Chinese car buyers continue to use mostly cash while personal loans are rare.
"It's collapsing, it's unbelievable, and most of it is from mortgages - I don't see how the housing sector is going at all," said Nicholas Lardy, a specialist in Chinese finance at the Peterson Institute for International Economics.
He added that the decline was so precipitous that it had to reflect weaker demand for housing, and not just regulatory restrictions on credit.
Increasing lending may be difficult now, and not just because of lackluster public interest in real estate. The central bank needs ever more reserves from commercial banks to buy dollars and prevent China's currency from rising against the U.S. dollar, so as to keep China's exports from slowing further.
The central bank spent one-seventh of China's entire economic output in the first half of this year to buy foreign currency.
China's trade surplus set a record of $28.7 billion in August, the government announced Wednesday. This was mainly because of an unexpected slowdown in the growth rate for imports. Slower growth of imports is a common sign of a weakening economy.
Assessing national trends in Chinese real estate is often difficult because of long lags in the data. The government releases annual data only for the value of all real estate sold or leased across the nation, while monthly data on prices come out with long delays. That makes it hard to pinpoint when the pace of transactions begins to slow, or the current level of prices.
Real estate brokers say that prices are generally holding up better for residential property in prime locations than in outlying areas, and that top-quality commercial buildings are faring better than older buildings.
Real estate difficulties are starting to affect the construction industry, although the skylines of Chinese cities remain dotted with cranes.
Ralph Gerson, the executive vice president of Guardian Industries, one of the world's largest glass-making companies, said that demand was rising less rapidly in China for the company's high-technology insulated glass for modern office buildings.
"It used to be booming, and now it's growing at a slower pace," he said.
Cities deep in China's interior appear to be the least affected by the current difficulties. Dan Yian, a real estate agent in Chongqing, said that the volume of housing transactions there had slowed by 20 percent to 30 percent so far this year. But prices have not yet fallen from a stable level of $730 a square meter, which works out to nearly $66,000 for a typical apartment of 90 square meters.
Export-dependent coastal cities in mainland China have had the steepest downturns in their real estate markets. Some of these problems are starting to have ripples in other Asian markets.
Freddy Wu, the chief executive of Hong Kong Property Services, said that his real estate agency had seen mainland investors default in recent months on a tenth of their purchases of Hong Kong apartments, forfeiting down payments.
"A lot of investors from China have their cash tied up in the mainland stock market and in mainland real estate, so they would rather take a loss now," instead of being required to sell mainland investments at a loss to come up with the cash to complete purchases in Hong Kong, he said.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: China - Properties
by winston » Fri Sep 12, 2008 4:32 pm
Vanke refuses property refunds in price row
China Vanke has rejected demands for refunds or compensation by customers who bought properties before it cut prices in late August, in a move analysts said could make potential buyers even more wary of the cooling real estate market.
The country's biggest listed real estate developer has slashed prices by up to 20 percent since late August for some residential complexes in Shanghai, Hangzhou and other cities as part of a sales promotion.
That angered recent buyers in those complexes, who have seen the value of their property fall even before moving in, and Vanke said some have demanded their money back.
Vanke will not compensate or refund anybody if such action is not based on the law or contracts, Vanke said.
China Vanke has rejected demands for refunds or compensation by customers who bought properties before it cut prices in late August, in a move analysts said could make potential buyers even more wary of the cooling real estate market.
The country's biggest listed real estate developer has slashed prices by up to 20 percent since late August for some residential complexes in Shanghai, Hangzhou and other cities as part of a sales promotion.
That angered recent buyers in those complexes, who have seen the value of their property fall even before moving in, and Vanke said some have demanded their money back.
Vanke will not compensate or refund anybody if such action is not based on the law or contracts, Vanke said.
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Re: China - Properties
by LenaHuat » Sat Sep 13, 2008 5:07 pm
2day's Zaobao reproduced this, originally from Bloomberg:
Unhappy Chinese buyers wrecked, smashed and ransacked Vanke offices in 2 cities.
Last nite, I watched Soho China's Chairman on Phoenix TV. Whoa, he looked pale, grim and troubled in a half-hour segment abt the Chinese property market. When I last saw him on Taiwanese TV, juz 3 months ago, he looked so energetic, happy and confident.
Our govt or NTUC should consider setting up retirement homes in Southern China now.
China Property Market Set for `Meltdown,' Morgan Stanley Says
Sept. 12 (Bloomberg) -- China's property market could be headed for a ``meltdown'' as home prices and sales decline, and bank earnings will be affected, according to Morgan Stanley.
``Property prices are already cracking in China in major cities,'' wrote Morgan Stanley analysts led by Jerry Lou in a note today. ``We believe the likelihood of a property sector meltdown is high. The impact on banks' earnings may be substantial.''
Unhappy Chinese buyers wrecked, smashed and ransacked Vanke offices in 2 cities.
Last nite, I watched Soho China's Chairman on Phoenix TV. Whoa, he looked pale, grim and troubled in a half-hour segment abt the Chinese property market. When I last saw him on Taiwanese TV, juz 3 months ago, he looked so energetic, happy and confident.
Our govt or NTUC should consider setting up retirement homes in Southern China now.
Please be forewarned that you are reading a post by an otiose housewife. 
****@@
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Re: China - Properties
by winston » Mon Sep 15, 2008 10:02 pm
From OCBC:-
Tough time ahead for developers in China
Developers in China under-cutting prices. Last week, China Vanke, the biggest listed property developer in PRC, reported a 35% drop in its August real estate sales and together with news of the developer cutting prices in Nanjing, Guangzhou, Shanghai and Beijing by as much as 20% also sent a negative signal to the China property market. Soon after, there was news of other developers substantially reducing their prices after China Vanke’s move.
Government’s tough stance to cool property market. There are no signs of the Chinese government stepping out to halt the slump in the property market. In an announcement by the People’s Bank of China in late August, the central bank continued its call for commercial banks to tighten their lending to property developers and restated its curbs on bank loans directly for land purchases by developers.
Share prices of Chinese developers took a battering. News of China Vanke’s weak sales and price cutting sent share prices of Chinese developers on a slide over the last week. China Vanke’s share price fell 11.5% last week, while the broad-base SSE Real Estate Index fell 8.8%. In Singapore, share price of Yanlord, the largest SGX-listed Chinese developer,
fell 15.1% last week.
Strong headwinds ahead for Chinese developers. We think recent price cuts could further depress pricing of residential properties and lead to prolong weakness in an already ailing China property market as other developers may undercut prices for their properties and buyers are likely to avoid the market on concerns of further price cuts.
Operating conditions for developers are likely to be tougher ahead amidst the current tight credit situation, slowing sales and price cutting. As such, we believe sentiment on Chinese developers could remain weak over the near future in anticipation of possibly more negative newsflow in the sector.
Tough time ahead for developers in China
Developers in China under-cutting prices. Last week, China Vanke, the biggest listed property developer in PRC, reported a 35% drop in its August real estate sales and together with news of the developer cutting prices in Nanjing, Guangzhou, Shanghai and Beijing by as much as 20% also sent a negative signal to the China property market. Soon after, there was news of other developers substantially reducing their prices after China Vanke’s move.
Government’s tough stance to cool property market. There are no signs of the Chinese government stepping out to halt the slump in the property market. In an announcement by the People’s Bank of China in late August, the central bank continued its call for commercial banks to tighten their lending to property developers and restated its curbs on bank loans directly for land purchases by developers.
Share prices of Chinese developers took a battering. News of China Vanke’s weak sales and price cutting sent share prices of Chinese developers on a slide over the last week. China Vanke’s share price fell 11.5% last week, while the broad-base SSE Real Estate Index fell 8.8%. In Singapore, share price of Yanlord, the largest SGX-listed Chinese developer,
fell 15.1% last week.
Strong headwinds ahead for Chinese developers. We think recent price cuts could further depress pricing of residential properties and lead to prolong weakness in an already ailing China property market as other developers may undercut prices for their properties and buyers are likely to avoid the market on concerns of further price cuts.
Operating conditions for developers are likely to be tougher ahead amidst the current tight credit situation, slowing sales and price cutting. As such, we believe sentiment on Chinese developers could remain weak over the near future in anticipation of possibly more negative newsflow in the sector.
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Re: China - Properties
by winston » Tue Sep 16, 2008 8:17 am
Mainland home prices tipped for peak-season fall
AlfredLiu
Mainland property developers are expected to be under pressure to cut home prices to boost sales volume in the peak season.
"The mainland property market is not likely to see a turnaround yet since the market has just started to experience a substantial fall in prices," said Woody Lam, managing director for Southern China at Savills.
He said prices in the mainland residential market would fall 15 to 20 percent by the end of the year. Home prices have persistently grown throughout the year despite recent reductions.
Morgan Stanley analyst Jerry Lou said prices and volume would fall in deep scale.
"We believe the likelihood of a property sector meltdown is high. The impact on banks' earnings may be substantial," he said.
Agile Property Holdings (3383) has cut average selling prices by 10 to 15 percent in the first half to about 7,000 yuan (HK$7,965) per square meter.
China Vanke, the largest listed property developer in the mainland, has cut prices between 25 to 30 percent and rejected demands from buyers for refunds or compensation on homes bought before its last price cut in late August.
SOHO China (0410) is the only developer to have raised prices, by 1 to 5 percent, since September 1.
"Our strategy to combat the weakening property market and economy is to raise prices," chairman Pan Shiyi told a state-run TV channel.
The company said it has racked up almost 6 billion yuan in revenue from its Sanlitun commercial project in Beijing since its July launch.
"Developers took a wait-and-see approach in the first eight months of the year because of the Olympics and credit tightening," said Alan Chiang Sheung- lai, head of residential property in China for DTZ Debenham Tie Leung. "So they are holding many projects on hand and want to lift sales in September and October, which are peak months."
AlfredLiu
Mainland property developers are expected to be under pressure to cut home prices to boost sales volume in the peak season.
"The mainland property market is not likely to see a turnaround yet since the market has just started to experience a substantial fall in prices," said Woody Lam, managing director for Southern China at Savills.
He said prices in the mainland residential market would fall 15 to 20 percent by the end of the year. Home prices have persistently grown throughout the year despite recent reductions.
Morgan Stanley analyst Jerry Lou said prices and volume would fall in deep scale.
"We believe the likelihood of a property sector meltdown is high. The impact on banks' earnings may be substantial," he said.
Agile Property Holdings (3383) has cut average selling prices by 10 to 15 percent in the first half to about 7,000 yuan (HK$7,965) per square meter.
China Vanke, the largest listed property developer in the mainland, has cut prices between 25 to 30 percent and rejected demands from buyers for refunds or compensation on homes bought before its last price cut in late August.
SOHO China (0410) is the only developer to have raised prices, by 1 to 5 percent, since September 1.
"Our strategy to combat the weakening property market and economy is to raise prices," chairman Pan Shiyi told a state-run TV channel.
The company said it has racked up almost 6 billion yuan in revenue from its Sanlitun commercial project in Beijing since its July launch.
"Developers took a wait-and-see approach in the first eight months of the year because of the Olympics and credit tightening," said Alan Chiang Sheung- lai, head of residential property in China for DTZ Debenham Tie Leung. "So they are holding many projects on hand and want to lift sales in September and October, which are peak months."
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Re: China - Properties
by winston » Thu Sep 18, 2008 8:54 pm
Morgan Stanley’s real estate funds have put up 2 large blocks of luxury residences in Shanghai for sale, including >100 serviced apartments in the Xintiandi area.
Morgan Stanley was one of the earliest to move into the real estate market in China. Home sales in China have fallen sharply in recent months and developers are reported to be cutting prices.
Morgan Stanley was one of the earliest to move into the real estate market in China. Home sales in China have fallen sharply in recent months and developers are reported to be cutting prices.
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Re: China - Properties
by winston » Mon Sep 22, 2008 8:35 am
Beijing possibly will ease property market control
Zhang Xin, chief executive, Soho China, one of the mainland’s biggest commercial property developers, said she expects Beijing to announce further measures to loosen its tight control of the property market to avoid a slump.
She said, ‘The property market is very important to China. It accounts for 10% of GDP and affects many other industries such as banks. I don’t think the government will want to see a hard landing.’
China’s property market has seen a significant slowdown this year after the government put in a series of regulations, such as a restriction on mortgage lending, to take the steam out of the sector.
The volume of property transaction fell 36% in Beijing in August, according to Soho China, and dropped by an even bigger degree in Shanghai.
In a move to boost the domestic economy and the property sector, China’s central bank this week cut the country’s benchmark interest rate for the first time in six years.
Zhang Xin said she expected China’s regulators to reveal more policies to rebuild confidence in the property market amid increasing signs of disastisfaction from real estate investors.
Source: Financial Times
Zhang Xin, chief executive, Soho China, one of the mainland’s biggest commercial property developers, said she expects Beijing to announce further measures to loosen its tight control of the property market to avoid a slump.
She said, ‘The property market is very important to China. It accounts for 10% of GDP and affects many other industries such as banks. I don’t think the government will want to see a hard landing.’
China’s property market has seen a significant slowdown this year after the government put in a series of regulations, such as a restriction on mortgage lending, to take the steam out of the sector.
The volume of property transaction fell 36% in Beijing in August, according to Soho China, and dropped by an even bigger degree in Shanghai.
In a move to boost the domestic economy and the property sector, China’s central bank this week cut the country’s benchmark interest rate for the first time in six years.
Zhang Xin said she expected China’s regulators to reveal more policies to rebuild confidence in the property market amid increasing signs of disastisfaction from real estate investors.
Source: Financial Times
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Re: China - Properties
by winston » Thu Oct 02, 2008 12:06 pm
Chinese property stocks rallied sharply after regional governments were seen supporting the troubled sector through measures like subsidising home purchases and easing loan limits and payment terms for developers.
Shares in China Overseas Land Investment (0688.HK: Quote, Profile, Research, Stock Buzz) soared 6.9 percent while China Resources Land (0291.HK: Quote, Profile, Research, Stock Buzz) gained 5.5 percent. Guangzhou R&F Properties (2777.HK: Quote, Profile, Research, Stock Buzz) shot up 10.8 percent on Thursday.
Shares in China Overseas Land Investment (0688.HK: Quote, Profile, Research, Stock Buzz) soared 6.9 percent while China Resources Land (0291.HK: Quote, Profile, Research, Stock Buzz) gained 5.5 percent. Guangzhou R&F Properties (2777.HK: Quote, Profile, Research, Stock Buzz) shot up 10.8 percent on Thursday.
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Re: China - Properties
by winston » Thu Oct 02, 2008 1:50 pm
China seen easing on property market, stocks soar
HONG KONG, Oct 2 (Reuters) - Shares in Chinese developers jumped on Wednesday on expectations that the government would ease back on measures to cool the housing market because of fears of a real estate crash.
Beijing had brought in policies to deter property speculation as the housing market raced ahead in the last five years, including clamping down on loans to developers, implementing a land appreciation tax and raising interest rates.
With home sales sliding in several parts of the country, and developers forced to slash prices to stay afloat, many analysts have said local governments are quietly easing rules because of fears of a property market crash.
That idea gathered pace with the announcement by the city government of Nanjing on Sept. 27 of measures to "maintain a stable and healthy development" of the real estate market, according to a Citigroup research note issued on Wednesday.
Among the measures, reported in a local newspaper, Nanjing would cut the supply of land for new development, give buyers of mass-market homes a subsidy, allow developers to defer payments for land and stretch construction deadlines.
To deter land speculation, the Chinese government had introduced a rule requiring developers to begin building on land within two years of buying it, or face confiscation. For details of government austerity measures click [ID:nHKG134223].
Average property price inflation in 70 large Chinese cities slowed to 5.3 percent in the year to August from 11.3 percent in the year to January, although prices in major cities such as Shenzhen have plunged by up to 40 percent.
Shares in China Overseas Land Investment (0688.HK: Quote, Profile, Research, Stock Buzz) soared close to 9 percent on Thursday morning. China Resources Land (0291.HK: Quote, Profile, Research, Stock Buzz) gained 5.5 percent while Guangzhou R&F Properties (2777.HK: Quote, Profile, Research, Stock Buzz) shot up 10.8 percent.
The Chinese central bank is expected to come forth and announce some measures to support the property market after the sharp slide in prices," said Castor Pang, strategist with Sun Hung Kai Financial.
"Regional governments have already announced some measures and it looks like the central government will also announce something to shore up the confidence in the market and keep growth rates intact."
When Beijing upped the ante in a fight against property speculation at the end of last year by ruling that buyers of second homes must pay 40 percent in equity, apartment sales and prices slid in the southern cities of Guangzhou and Shenzhen.
Shares in some Chinese developers are down as much as 80 percent since a peak last November and most trade at discounts of between 60 percent and 85 percent to net asset value.
Because of the market slump, as many as 30 property firms have shelved IPOs planned for this year. Many took on pre-IPO funding from private equity and hedge funds, and will have to repay investors soon if they do not push through market listings.
And thousands more small firms are vulnerable, analysts say, as banks cut their loans to developers by 30 percent in the first half of this year to 399 billion yuan ($58 billion).
HONG KONG, Oct 2 (Reuters) - Shares in Chinese developers jumped on Wednesday on expectations that the government would ease back on measures to cool the housing market because of fears of a real estate crash.
Beijing had brought in policies to deter property speculation as the housing market raced ahead in the last five years, including clamping down on loans to developers, implementing a land appreciation tax and raising interest rates.
With home sales sliding in several parts of the country, and developers forced to slash prices to stay afloat, many analysts have said local governments are quietly easing rules because of fears of a property market crash.
That idea gathered pace with the announcement by the city government of Nanjing on Sept. 27 of measures to "maintain a stable and healthy development" of the real estate market, according to a Citigroup research note issued on Wednesday.
Among the measures, reported in a local newspaper, Nanjing would cut the supply of land for new development, give buyers of mass-market homes a subsidy, allow developers to defer payments for land and stretch construction deadlines.
To deter land speculation, the Chinese government had introduced a rule requiring developers to begin building on land within two years of buying it, or face confiscation. For details of government austerity measures click [ID:nHKG134223].
Average property price inflation in 70 large Chinese cities slowed to 5.3 percent in the year to August from 11.3 percent in the year to January, although prices in major cities such as Shenzhen have plunged by up to 40 percent.
Shares in China Overseas Land Investment (0688.HK: Quote, Profile, Research, Stock Buzz) soared close to 9 percent on Thursday morning. China Resources Land (0291.HK: Quote, Profile, Research, Stock Buzz) gained 5.5 percent while Guangzhou R&F Properties (2777.HK: Quote, Profile, Research, Stock Buzz) shot up 10.8 percent.
The Chinese central bank is expected to come forth and announce some measures to support the property market after the sharp slide in prices," said Castor Pang, strategist with Sun Hung Kai Financial.
"Regional governments have already announced some measures and it looks like the central government will also announce something to shore up the confidence in the market and keep growth rates intact."
When Beijing upped the ante in a fight against property speculation at the end of last year by ruling that buyers of second homes must pay 40 percent in equity, apartment sales and prices slid in the southern cities of Guangzhou and Shenzhen.
Shares in some Chinese developers are down as much as 80 percent since a peak last November and most trade at discounts of between 60 percent and 85 percent to net asset value.
Because of the market slump, as many as 30 property firms have shelved IPOs planned for this year. Many took on pre-IPO funding from private equity and hedge funds, and will have to repay investors soon if they do not push through market listings.
And thousands more small firms are vulnerable, analysts say, as banks cut their loans to developers by 30 percent in the first half of this year to 399 billion yuan ($58 billion).
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