China property

Property sales and real estate investment in China continue to dwindle. Now some experts expect the situation will last longer than expected, with some smaller developers folding altogether.

Liu Wenwei, an economic planner, said sales of commercial homes totaled 277 million square meters nationwide in the first 7 months this year. The number is down nearly 11% from last year. And the growth rate is 37.2 percentage points lower than a year ago.

The amount of completed residential or existing homes is down 18% in terms of area, from a year ago. And the number of pre-sale residential homes is down nearly 8%.

Nie Meisheng, Chairwoman China Real Estate Chamber of Commerce, said, ‘China’s property sector is experiencing typical stagflation at the moment. Trading is declining, which also drags down investment. While real overall housing prices in the country are actually growing.’

Property investment has also slowed in China since the middle of the year. Figures from the National Development and Reform Commission show that during the first 7 months this year, Chinese developers bought 5% more land use right, year on year. But the growth rate declined 6.7 percentage points from a year ago. Land use right purchases in July alone dipped by 28%.

Nie Meisheng said,’Developers are very cautious now when taking land use right. One of the reasons is they have no clues as to what the market will look like in 2009. Another reason is that it will take them more time to balance their cash flows.’

Much more HERE.
Source: CCTV.com

China real estate

The China Insurance Regulatory Commission has said that China’s insurance companies are soon to be allowed to invest in the domestic real estate sector.

Wu Dingfu, Chairman of the China Insurance Regulatory Commission, quoted in the state media, said the draft of the revised insurance law allows insurance companies to invest in ‘bonds, stocks, funds and real estate.’

Currently, insurers have to set up a separate investment arm to channel money to some of these markets and this new ruling may bring more investment into the top end of the property market.

Ping An Insurance put RMB4 billion in the property market last year through its investment firm Ping An Trust & Investment.

Several Chinese banks have been approved to invest in the insurance market and set up joint ventures with insurers.

The end result is that as China becomes more lenient in its policies to keep banking and insurance markets separate, the financial industries become more intertwined.
Source: China Business News

Beijing housing

Chen Jian, executive president of Beijing Olympic Economy Research Association, said at a press conference that the housing prices in Beijing after the Olympics will go up following a period of adjustment. What he did not say is how long that period of adjustment might be.

He said general housing prices in Beijing were rational when the city prepared the Olympic Games but that some bubbles arose between 2005 and 2007.

According to Chen Jian, from the end of 2007 to the first half of 2008, the city’s real estate market entered a period of adjustment, and the period may be prolonged after the Games.

However, he sees the room for housing price declines as being very limited and the ensuing huge housing demand will support the city’s housing prices.

But according to experts at a forum sponsored by the Beijing Times, Peking University and Renmin University of China, the shrinking transaction and price declines in China’s key property markets mark an end to the era where property enterprises could earn huge profits. More on this HERE.
Source: China Daily

Vanke report illustration

In an internal e-mai, Yu Liang, the president of Vanke, China’s biggest listed property developer, said property will probably see a slowdown in growth in the near future, but its long-term outlook is still rosy.

China’s property market is showing signs of losing momentum after surging for the past few years. House prices in Shenzhen, Vanke’s hometown, have been the hardest hit among 17 major Chinese cities, according to official figures.

Yu Liang told Vanke staff in an e-mail, ‘The strong wait-and-see sentiment, the plunge in trading volume and bearish projections for the industry are all in sharp contrast to the conditions in 2006 and 2007.

‘From a short-term perspective, a number of uncertainties exist during the adjustment period . . . Based on our judgment, the lack of capital in the industry will continue in the years ahead.’ (The illustration is at the top of the Vanke site. Its symbolism is unclear but it is pretty.)
Source: Reuters

China property

The development of real estate in China has good prospects in the long run despite the durrent sluggish demand according to an expert from the National Development and Reform Commission (NDRC).

Wang Yiming, vice president of the Macro Economy Research Institute of the NDRC, said, ‘The development of real estate has good prospects in a relatively long term. After rational adjustment, it will show a more sound development trend.’

Wang Yiming told a press conference at the 2008 Beijing International Media Center that amid an estimated continuous urbanization drive in China, more people may move to cities in the next decade and more, creating increasing demand for houses.

He said that relative policies and measures will be worked out sooner or later to promote the stable and sound development of the sector.

Real estate investment increased by more than 30% between January and July this year, despite the shrinking housing demand since the second half of last year.
Source: China View