China’s recent moves to lower interest rates and cut taxes on home sales have been aimed at reviving the real estate market in lower tier cities, but mostly appear to be pumping up a housing bubble in Shanghai and Shenzhen. Plus one of the mainland’s biggest mall developers expects profits to drop by half and Poly Real Estate looks for a low-risk path in Australia. Read on for these stories and more.
Shanghai’s new housing market posted sales of over 78 percent last week although the average price fell.
The area of new homes sold, excluding government-subsidized affordable housing, soared 78.1 percent week on week to 505,700 square meters, the highest seven-day volume registered in about eight months, Shanghai Homelink Real Estate Agency Co said in a report released yesterday. Read more>>
A number of Chinese mall operators and department store chains have posted profit warnings in the past few weeks, reflecting weaker retail sales amid an economic slowdown and an e-commerce boom, with analysts predicting few will survive as competition heats up.
Joy City Property, a leading shopping mall developer targeting younger consumers and the property arm of state-owned food giant Cofco, said last week that rental growth had slowed and warned investors of a prospective 50 per cent to 60 per cent fall in net profit for last year due to a decrease in the revaluation of investment properties and exchange losses. Read more>>
Chinese megadeveloper Poly Real Estate does a quirky test just before it builds its first apartment: it counts the number of apartments with lights on.
The test in Chinese, “liang deng lu”, gives the developer a sense of “living demand”, Australian managing director Arthur Wang said in the company’s first interview in Australia.
“And the living demand in Australia is high,” he said. “The test indicates how many people actually live in their own homes, an indication that they can either afford to own or lease them. Read more>>
Following the recent uptick in housing prices – an astounding 35% rise since the beginning of the year – Shanghai residents have rushed to purchase properties before prices spiral beyond their grasp. While government-backed news sources such as Shanghai Daily have lauded this as a positive turnaround following last year’s crash, outside analysts do not see this as a sign of total recovery.
Housing prices around China, especially in tier-one cities like Shanghai, have seen multifold increases in the past decade and a half. Prices soared from 5,118 yuan/square meter in 2003 to 33,577 yuan/square meter as of February 2016. This is far higher than the average return on capital placed in state-owned banks or the burgeoning stock market. Read more>>
Guangzhou is tipped to be the first of the mainland’s four tier-one cities to lift restrictions on property buyers from Hong Kong and Macau.
But industry experts believe the move is not enough to speed up sales in Guangzhou or help Guangdong meet its target of clearing 160 million square metres of empty housing stock by 2018. Read more>>
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