Shenzhen skyline

Although most of the news on the property front is downbeat it is possible to see both the rapid expansion of the past and the rapid expansion of the future.

Despite current problems with dynamic economies based on industry, service, shipping and logistics, Shenzhen and Guangzhou are China’s fastest-changing cities.

Ten years ago, the Minnan Hotel dominated the skyline in Xiamen, a special economic zone on the Taiwan Strait. At 550 feet tall — about the size of the skyscrapers that abut New York’s Central Park — it was a conspicuous outlier in a developing city.

Now, it’s beginning to look like a tree in a forest, as buildings just as tall have popped up across the waterfront and in the city center.

But development in Xiamen hasn’t been nearly as rapid as in Shenzhen or Guangzhou, two cities on the Pearl River Delta. With dynamic economies based on industry, service, shipping and logistics, they are China’s fastest-changing cities.

Hong Kong, Shanghai and Beijing round out the top five. They’re followed by Dalian and Nanjing, two cities that have emerged as factory-based growth centers, but are also turning into vibrant markets for consumer goods.

These rankings are based on three measures:

Economic growth using indexed data from the Chinese Academy of Social Sciences (CASS), a state research agency. (Smaller industrial boomtowns like Hefei and Suzhou scored particularly well by this measure.)
The growth of each city as a market.
The cities’ skylines. The government that didn’t officially use the word ‘urbanization’ until the late ’90s. Skyscrapers and cranes may be the best marker of globalization’s effect on China. Each city was ranked by the aggregate height of its skyline.

More HERE.
Source: Financial Post

Real estate mixed

China’s real estate sector has expanded in terms of investment deals, with $25bn of property transactions in the first half of the year. However it has been mainly driven by domestic investors.

Deals by foreign firms declined by more than two-thirds over the past year.

Investment in Chinese real estate rose 78% in the first six months of the year compared to 2007, according to a report by property services firm DTZ.

However, the number of deals closed by foreign firms has declined substantially in the first six months of 2008 — down by more than 75% over the same period last year.

According to DTZ’s first half market review, a total of 318 major
transactions of $10 million or more were recorded in the first
six months of 2008, amounting to $25 billion. The vast majority involved site purchases for development.
More HERE
Source: Private Equity Real Estate

An article posted by a 27 year-old real estate broker on his blog has drawn a lot of attention and triggered a high-level probe into the situation of Shenzhen’s mortgage loans.

The blogger named ‘Fengyu’ claims that Shenzhen has been suffering from a string of housing  mortgage defaults which could bring RMB1.5 billion worth of bad loans to commercial lenders in Shekou district alone and up to hundreds billion financial losses for Shenzhen as a whole.

Property owners protesting at Vanke abut the drop in value of newly-purchased property and demanding compensation.

According to ‘Fengyu’, a considerable amount of purchases made by property investors at the last quarter of the previous year and early this year were purely speculative.

Investors are angered by the fact that the average housing prices in Shenzhen has declined more than 20% in the past six months plus problems concerning decoration quality, community management and green land ratio.

It is confirmed by lenders that some property owners have collectively decided to suspend their monthly mortgage payments.

Local banks have advised those customers to make the right decision because credit defaults will put negative records on their credit history.
More HERE.
Source: Jongo News

Shanghai apartments

To An Wei, a white-collar migrant worker in Shanghai, China’s tax exemption on house purchase and mortgage deposits reduction are a real stimulus for home buying.

The newly-wed IT worker said, ‘The new policy would not only save me more than RMB4,400 ($644) from the tax reduction in purchasing a 90-square-meter flat in Shanghai and make it earlier to obtain a bank loan to pay for the mortgage, but also give me confidence in the stability of the housing market.’

The Ministry of Finance, the State Administration of Taxation and the People’s Bank of China, the country’s central bank, made the synchronous move on Wednesday to announce a series of new measures to boost the domestic real estate market, which had shown signs of slowing amid the global financial turmoil.

‘The policy is concentrated on tax reduction and relaxing restrictions on financial institutes to give loans to private homebuyers,’ said Nie Meisheng, the Chamber of Real Estate of the All-China Federation of Industry and Commerce director.

The chamber was one of the advisors prompting the promulgation of the policy.

The Ministry of Finance announced on Wednesday to exempt the stamp tax on property purchase and the value-added tax of land on property sales, starting from Nov. 1, to boost the slowing real estate sector.

More HERE.
Source: China View

Nicholas Loup Grosvenor

British real-estate development and investment firm Grosvenor launched a $600 million fund that will invest in China’s shopping malls and is seeking property-development opportunities in Shanghai.

Grosvenor’s Asia-Pacific chief executive, Nicholas Loup, said the company is maintaining its strategy of significantly expanding its presence in China in the next five to 10 years, despite the recent global financial turmoil. The firm, with $25.7 billion in assets under management at the end of 2007, would like Asia to eventually represent 20% of its total assets.
Source: Wall Street Journal