Self-help groups getting together to buy property.

Thousands of would-be home buyers are banding together in China to negotiate discounted prices with real estate developers in a unique solution that some hope could help prevent a property market crash.

China has so far escaped the worst of the global credit crunch, but borrowing conditions have been tightened to fight inflation — keeping many consumers off the property ladder.

At the same time, overstretched developers are unable sell houses to generate revenue — or borrow more money from banks — so they can pay down their debts.

Since July, more than 30,000 people have signed up to the ‘Housing for 10,000′ a group buying web site created by Zou Tao, a 34-year-old activist in Shenzhen, a booming city across the border from Hong Kong.

He said of those who signed up, about 500 have already succeeded in buying homes from developers at discounts ranging from RMB50,000 to RMB100,000 ($7,350 to $14,700), he said.

Others have since copied the model in cities such as Xian, Wuhan and Jinan.
Source: The China Post

Yvonne Hue

Plunging property and share prices knocked a third off the average wealth of China’s billionaires in the first fall for seven years.

Zhang Yin, director of Nine Dragons Paper lost $8.4 billion after shares of her scrap paper company dropped by 86%.

The 50 richest people in China were worth $2.43 billion on average, down from $3.63 billion in 2007, according to an annual list from Hurun.

Amongst the big losers was, seen here, the delectable Yvonne Xue, 44, board chairman general manager of Shanghai Si Tong Cable Industry and vice board chairman of Shanghai Huiyang Industry.

Gome Chief Executive Officer Huang Guangyu [left] has topped the rich topped the list three times in the last five years Photo: REUTERS

Zhang Yin, director of Nine Dragons Paper lost $8.4 billion after shares of her scrap paper company dropped by 86% Photo: GETTY

The 50 richest people in China were worth $2.43 billion on average, down from $3.63 billion in 2007.

Back in first place, with a personal fortune of USD6.3 billion, was 39-year-old Huang Guangyu, nicknamed the Price Butcher because of the discounts available at Gome, his electrical retail empire. Mr Huang has topped the list three times in the last five years.

His elevation knocked Yang Huiyan, the 27-year-old heiress who was given a controlling stake in Country Garden, an enormous property developer, into third place.

Miss Yang saw her personal wealth plummet from $17.5billion to $4.9 billion as the share price of Country Garden nose-dived and jitters derailed the Chinese property boom.

Zhang Yin, the chairwoman of Nine Dragons Paper, who was the first woman to top the rich list in 2006, lost $8.4 billion after shares of her scrap paper company dropped by 86 per cent.

Two more property tycoons also suffered badly. Xu Rongmao, chairman of Shimao, lost $4.4 billion and Zhang Li, co-chairman of Guangzhou R&F properties, lost $3.6 billion.

China was home to 101 people with $1 billion or more of personal wealth, declining from 106 last year.

Hui Wing-mau

Chinese real estate developer Shimao Property Holdings has reported that its first-half net profit fell 56% from a year earlier on lower property sales.

Chairman Hui Wing-mau, who was ranked by Forbes Magazine late last year as China’s second-richest person, said that the company had cut its contracted property sales target this year by 20%, as he expected China’s real estate market to remain weak in the second half.

Shanghai-based Shimao said its net profit for the six months to June 30 was 919.1 million yuan ($167 million), down from 2.08 billion yuan in the same period of 2007.
Revenue fell 24%  to RMB1.84 billion from RMB2.42 billion.
Revenue from property sales dropped 42% to RMB1.4 billion.

Shimao plans to complete 17 property projects in the second half, with a total gross floor area of 1.6 million square metres.

The company had a developable land bank of 26.4 million square meters, enough for development for six to seven years
Source: The Australian

Canton Properties

London-listed Canton Property Investment, which develops malls in China, has said its executive chairman had disappeared and its shares had been suspended while the firm sought extra funding.

The Hong Kong-based company, incorporated in early 2007, said in a statement that the executive chairperson, Keng Wong had ‘recently been absent from the company and uncontactable.’

Wong’s secretary told Reuters she had not seen him since August, while executives at the company were unavailable for comment.

Canton Property is investing in projects in the southern Chinese city of Guangzhou, where property prices have dropped by as much as 30% in the last year after booming for years.

In March, the company said it had bought from Keng Wong and a business partner, Ye Zhuansong, a 100% stake in a mixed-use property project in Guangzhou for about $350 million.

The project, called Canton Finance Center and including shopping space, offices, serviced apartments and a hotel, would be worth about $1.2 billion when completed, the firm said at the time. But in its statement yesterday, Canton Property said it was seeking funding for the project.

Canton’s non-executive director David Brewer, who held the largely ceremonial post of the Lord Mayor of London in 2005 and 2006, resigned after a board meeting on Wednesday failed to agree on the appointment of an interim chairman.
Source: Reuters

Sluggish sales in real estate

After months of steely resistance, Chinese property developers have finally accepted the inevitable and are cutting prices to boost falling sales.

Whether the move succeeds in putting a floor under the market will help determine the fate of the economy over the coming year.

Real estate accounts for 24% of China’s fixed-asset investment and is crucial not only for domestic steel makers but also for global producers of myriad construction inputs such as aluminum and copper.

Jonathan Anderson, a UBS economist in Hong Kong said he expects property and construction activity to stabilize and rebound in the first half of next year.

But many developers, harried by declining sales and financing constraints, are less optimistic.

Prices in major cities such as Shenzhen have plunged by up to 40%.

Average property price inflation in 70 large Chinese cities slowed to 5.3% in the year to August from 11.3% in the year to January.

For some developers, selling unsold homes at a discount is their last hope to survive.
More on this HERE.
Source: Reuters