China - Housing 01 (May 08 - May 10)

[winston]

Sales lift mainland property stocks by Alfred Liu, The Standard HK

Mainland property stocks surged yesterday on solid sales and rising prices.

The rebound in mainland residential real estate was underlined with transactions in Beijing rising 19 percent in April from the previous month to a record of 14,976 flats, according to state-run Shanghai Securities News.

The gross floor area of units sold in Shanghai last month jumped 20 percent from March to a three-year high. And new units sold in Shenzhen between January and April doubled from the same period a year ago.

Shimao Property (0813) yesterday said a mainland unit, Shanghai Shimao Commercial Group, and a developer in Qingdao acquired a 240,000 square meter commercial site in the city for 920 million yuan (HK$1.04 billion). Shimao shares rose almost 10 percent yesterday to close at HK$9.59.

Shares in Agile Property (3383) surged 15.56 percent to HK$6.76 while Guangzhou R&F Properties (2777) gained 12.62 percent to HK$14.28. Country Garden (2007) rose 15.23 percent to HK$2.95 and KWG Property (1813) climbed 17.67 percent to HK$3.53.

Property analyst Lee Wee-liat of investment brokerage Nomura International (HK), said transaction volumes in most mainland cities are satisfactory and higher than 2007 levels. "Inventory continues to decline as demand is increasing at a faster pace than supply," Lee said.

"Developers are also moderately lifting prices of projects that are selling well. The recovery momentum is broadening and deepening.

We reiterate our bullish call."
But mainland developers, particularly Greentown China (3900), face refunding risks, Moody's analyst Kaven Tsang said.

"The market recently provided a respite to those developers who needed cash," Tsang said. "However, we do not foresee a sustained improvement in developers' finances and maintain a negative outlook for the sector."

[winston]

DJ MARKET TALK: Land Buys China Developers' Next Catalyst -Nomura

1221 [Dow Jones] Another day of strong performance by mainland developers, led by Greentown China's (3900.HK) 14.6% jump to HK$6.36 on news of Beijing land buy via share issue. Nomura tips "land acquisition the next catalyst" for China property stocks; says as developers continue to record strong sales, clear inventories, land buys will be major catalyst in boosting NAV, stock prices.

"This is particularly the case given that land prices across major cities have fallen by 30%-50% from their peaks in 2H07." As such, any developers buying landbank this year should see margin protection moving into 2011 and beyond.

Adds, last week of April saw 5 major land auctions, with developers indeed turned more aggressive in bidding, with all 5 plots of land transacted at 30%-80% premiums over minimum bid prices.

[winston]

DJ MARKET TALK: Citi Tips China Ppty Sector More Rational In 2009

1203 [Dow Jones] Citigroup tips China's property sector to see more rational expectations on housing and land prices after corrections in 2008. Says expects this year likely to resemble 2006, with good transaction volume driven by end-user demand, pickup in construction volumes, capex by developers with execution track records, strong balance sheets.

Expects moderate, healthy increases in property prices in selected regions, driven by local economic growth; also tips rational land bank acquisitions by some developers

[winston]

DJ MARKET TALK: China Real Estate Sector Still Pressured - CBRE

1313 [Dow Jones] It's too early to say China's real estate industry is in sustainable revival, given recent spike in property transaction volume, says property service firm CB Richard Ellis, citing oversupply, developers' rising costs, difficulty in new financing; adds overbuilding in office sector particularly bad in Beijing, Shenyang, Xi'an, Nanjing, Ningbo.

Also, while some developers had begun considering holding commercial properties vs pure residential development-sales model, "the new business pattern of holding income-producing projects such as offices, shopping centers and hotels carries forward issues such as different financial engineering, property operation and management - areas where most local developers are relatively weak at the moment."

Comments gel with recent Moody's comments on sector, although some market analysts have been turning more positive of late.

[winston]

DJ MARKET TALK: China Ppty Stocks Consolidate; Buy Strong Players

1039 [Dow Jones] Mainland property stocks mostly in consolidation mode with big name developers not rising or falling by more than 2%; sentiment getting slight lift from SCMP report R&F Properties (2777.HK) clinched first land purchase in more than a year yesterday by outbidding rivals for Beijing residential site for CNY1.02 billion.

DBS Vickers says sector's fundamentals strengthening but "we are not yet at the inflection point for a price upcycle"; says sector's recent strong uptick priced in better outlook, with excessive liquidity resulting in "over accumulation" of high-beta property plays, market not differentiating between strong, weak players.

House suggests refocusing on companies with strong fundamentals, such as China Overseas Land (0688.HK), China Resources Land (1109.HK).

[winston]

For my records:-

Saw some apartments around Black Forest Lake ( Zi Chu Yuan ).

Block A of Ren Ji Shan Juan has the best view. Not cheap at RMB 30k per sq metre.

Nice view of the lake. A bit old though at about 7 years. Property Maintenance is so so ..

[winston]

DJ MARKET TALK: China Ppty Sector In Early Stage Of Expansion-UOB

1030 [Dow Jones] China's property sector is in early stage of another round of expansion, transitioning from de-stocking, UOB KayHian says, rates sector at Overweight. Notes, China property sales remain robust, but sales volatility likely ahead with Dragon Boat holiday this week.

Adds, while positive on 2H09 overall sales outlook, would not be surprised by June, July seasonal sales slowdown. Notes average housing inventories in major cities down 20%-30% from end-2008 peak levels, acting as key driver of developers' land bank acquisitions.

Tips re-rating ahead for companies with low net gearing, such as CRL (1109.HK), Sino-Ocean (3377.HK), and those with proven strong year-to-date sales records, improved balance sheets, such as Guangzhou R&F (2777.HK), Agile (3383.HK), Shimao (0813.HK).

[LenaHuat]

In June, Shenzhen property prices shoot up 28.1%. No wonder its mayor has disappeared
http://finance.ifeng.com/news/hgjj/20090609/762406.shtml

[winston]

Prices in Shanghai has rebounded too ..

A property in Yanlord Garden, Lu Zia Zhui, Pudong just changed hands at RMB 50,000 per sq m..

[LenaHuat]

Yes, Winston, I suppose it's due to generous housing loan expansion by the banks