Beijing may allow some developers to add leverage and take more time to meet debt targets
In today’s roundup of regional news headlines, China continues its relaxation of property curbs with plans to dial back the “three red lines” policy and policies to offer cities an exit ramp from an imposed floor on mortgage rates.
China May Ease ‘Three Red Lines’ Property Rules in Big Shift
China is planning to relax restrictions on developer borrowing, dialling back the stringent “three red lines” policy that exacerbated one of the biggest real estate meltdowns in the country’s history.
Beijing may allow some property firms to add more leverage by easing borrowing caps and push back the grace period for meeting debt targets set by the policy, according to people familiar with the matter. The deadline could be extended by at least six months from the original 30 June date, the people said. Read more>>
Regulators Set Guidelines for Letting Cities Cut First-Home Loan Rates
China will allow cities to lower and even do away with the floor on mortgage rates for first-time homebuyers if prices of newly built residential properties fall for three consecutive months, in a move aimed at further supporting the real estate market.
If sales prices fall from both a year earlier and the previous three-month period, local governments can maintain, reduce or remove minimum interest rates on first-time home loans, according to a new dynamic adjustment mechanism unveiled Thursday by the People’s Bank of China and the China Banking and Insurance Regulatory Commission. Read more>>
Private Equity Investments in Indian Real Estate Reached $3.4B in 2022
Private equity investments in the Indian real estate industry stood at $3.4 billion at the end of 2022, staying at levels seen in 2021, according to international property consultant Savills.
Data suggests that commercial office assets remained the front runner during 2022, garnering nearly half,or 45%, of the investment pie. Residential and retail sectors also witnessed robust growth, riding high on the end user’s demand. Read more>>
Guangzhou Plans 1,722 Projects Worth $945B in 2023
China’s southern manufacturing hub of Guangzhou plans 1,722 projects in 2023 worth more than RMB 6.5 trillion ($945 billion), state TV reported Thursday, after the city was hit by stringent COVID-19 curbs in late 2022, according to Reuters.
In 2023 alone, RMB 526.1 billion is expected to be invested in the projects spanning transport, new energy vehicles and biomedicine, the report said. Read more>>
BlackRock, M&G Defer Withdrawals From UK Property Funds
US fund manager BlackRock and British asset manager M&G are delaying redemptions from UK property funds managing about £8.1 billion ($9.8 billion) worth of assets as investors seek to exit Britain’s real estate market.
Open-ended real estate funds in Britain have been battling to meet a surge in demand for redemptions against a backdrop of high inflation and economic uncertainty, as valuations come under pressure from rising interest rates. Read more>>
Housing Sales Across India’s Top 7 Cities Hit Decadal High
Housing sales in India’s top seven cities — Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune — in 2022 hit 215,000 units, a decadal high, JLL said Thursday. In 2010, sales totalled 216,762 units.
According to the property consultancy, sales across the seven cities rose 68 percent year-on-year in 2022, with more than 50,000 units sold in each of the four quarters. High sales numbers are significant given rising mortgage rates and property prices and global headwinds during the year. Read more>>
China Weighs Cap on Property Agent Commissions to Bolster Sales
China may impose a nationwide cap on real estate commissions to boost demand in the flagging property market and regulate brokerage fee collection, according to people familiar with the situation.
Authorities are considering a range of 2 to 2.5 percent of the sale price as a guide, one of the people said, asking not to be identified discussing a private matter. The cap, once in place, is likely to be adjusted every one to three years based on market conditions, the people said. Read more>>
Grandson of SHKP Co-Founder Forges His Own Path as a Tech Investor
Joseph Fung knows full well that he was born with a silver spoon in his mouth. The 41-year-old is a grandson of legendary share trader Fung King Hey, one of the “Three Musketeers”, along with Lee Shau Kee and Kwok Tak Seng, who co-founded Sun Hung Kai Properties, one of the world’s biggest property developers by market capitalisation.
It was this awareness that gave Joseph the courage to chart his own path. While the scions of Lee Shau Kee and Kwok Tak Seng stayed in real estate, Joseph is trying to make his own name as an investor focused on a completely unrelated industry: life sciences. Read more>>
Tune in again soon for more real estate news and be sure to follow @Mingtiandi on Twitter, or bookmark Mingtiandi’s LinkedIn page for headlines as they happen.
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