Shimao Property

China-focused developer Shimao Property expects the country’s ailing property sector to pick up in the first quarter next year as homebuyers return to the market, and said it is confident of meeting its annual sales target thanks to moves by Beijing to stimulate demand.

Hui Wingmau, the chairman, said, ‘The measures will help lead to a healthy and stable development of the property sector, and aid home buyers to regain confidence. Homebuyers who are now staying on the sidelines will eventually return to the market. We will be able to see a recovery in the coming spring.’

The group’s property sales totalled RMB10 billion ($1.47-billion) for the first 10 months of the year, against a full-year target of RMB14 billion. Hui Wingmau said, ‘We are doing a lot of work to catch up with our target. We are confident that we can meet the target.’

Last month, Shimao said property sales totalled RMB8.3-billion for the first nine months of 2008, up 21.3% from the same period a year ago, thanks to contributions from its projects in Chinese cities such as Shanghai and Hangzhou. Its biggest rival, China Vanke, China’s largest listed property developer, has reported a drop in property sales.
Source: Financial Post Canada

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

Chinese real estate

Xinhua Finance has published a report on ‘Credit Risks of China’s Real Estate Sector’ that identifies policy risk as the primary risk factor affecting the credit worthiness of the real estate industry.

The report discusses the status of China’s real estate developers, and examines both business and financial issues challenging the industry.

The report explains that China’s real estate sector has benefited from the nation’s strong economic growth and favorable government policy since the beginning of economic reforms.

But with the slowing of the economy and the tightening of credit, Xinhua Finance believes that the recent liquidity problems of the industry are the beginning of a process of unfolding credit risks.

These risks are associated with the nature of the industry and have accumulated over time.
Much, much more HERE.
Source: MarketWatch

The National Development and Reform Commission and the National Bureau of Statistics (NBS) reports that China’s urban property prices rose 10.1% in April from a year earlier, slightly lower than in March.

The average property prices in 70 large- and medium-sized cities dipped by 0.6 percentage point in April from a month earlier. Last year, property prices rose 7.6% year-on-year.

Carlby Xie, head of research at the Colliers International’s Beijing branch, a real estate services company said, ‘Based on our statistics of the middle- and high-end markets, the recent price trend remains stable. I would call it ’stagnant’ if we see the situation in terms of purchase price.’

Carlby Xie said people have remained reluctant to purchase houses, anticipating a price correction after the Olympic Games in August. And added, ‘The purchase sentiment could possibly rebound by the year-end.’

The NBS said urban fixed-assets investment rose 25.7% in the first four months year-on-year, compared with a 25.9% increase in the first quarter. Last year, the growth was 25.8%.

Song Yu and Liang Hong with Goldman Sachs in Hong Kong have calculated in a research note that investment in April was up 25.3% from a year earlier, compared with 27.3% in March.

They said the softening growth in April could have been distorted by the public holiday adjustments this year (the May Day ‘golden week’ has been replaced by three traditional holidays in April, June and September), which resulted in fewer working days in April of this year compared with last year.
Source: China Daily.com

Discounts and other incentives are being used to fight shrinking sales of property.

Vanke, the largest developer on the mainland by assets, announced an across-the-board discount of over 5% for 10 of its properties in Shanghai. It is the first time the company offered such a large discount in the city. Vanke is offering even better terms for cash buyers. A sales clerk at one of the company’s offices said those paying the full amount at once will get as much as an 8% discount.

Industry insiders said such a strong promotional offer by a major developer in the city indicates the market will continue to be bleak in the months to come.

Chen Sheng, director of China Real Estate Index System, said many other real estate developers may follow Vanke’s example by offering more discounts.

Shanghai-based Jing Rui Properties has also lowered its prices by offering a 3% discount for group purchases and a 2% discount for those recommended by previous buyers.
Hopson Development, a Hong Kong-listed real estate firm, picked out several apartments for sales promotion in Beijing, cutting down prices from RMB30,000 per sq m to RMB22,500 per sq m.
A project developed by Beijing-based Huayuan Real Estate is offering over 7% discount for those buying small apartments.
Coastal Greenland group, also a Hong Kong developer, reduced its prices for new projects in Beijing, lowering them by around RMB400 per sq m from the average of RMB17,000 per sq m.

Industry analysts said a number of large developers are trying to sell quickly and then take over other projects and smaller developers when the market dives. Some of them, however, are eager to sell off their projects to improve their annual reports.

Zhang Lei, a marketing professional with a developer that has several high-end projects going in Beijing, said, ‘Sales of high-end projects will face a big challenge this year as most buyers are investment-oriented.’
Source: China Daily