Vanke’s Wang Shi may be giving lessons on the cyclical nature of markets these days
If the performance of Vanke (000002.SZ) represents a best-case scenario for the nation’s housing market, then the industry has fallen by at least five percent in the last year, according to financial data released last week by China’s largest real estate developer by revenues.
Vanke’s March financials show that the Shenzhen-based firm’s sales were down 5.1 percent to RMB 14.43 billion ($2.32 billion), and transactions were down 4.8 percent to 1.21 million square metres in terms of GFA compared to March of last year.
China’s property market has been hit this year with a major slowdown in the number of transactions, and this has begun putting pressure on developers, particularly in smaller cities where markets have been flooded with new homes.
Home Sales Drop 22.86 Percent in Biggest Cities
According to website dzhnews.com, 12 major cities in China, including Beijing and Shanghai recorded home sales totalling 27.72 million square metres during the first quarter of 2014, off 22.86 percent from the same period a year earlier.
Vanke, which according to its website, has projects in 50 Chinese cities, in addition to a number of overseas developments, has effectively diversified its investments among communities at many levels of development, and is likely to be under less pressure than many smaller developers who have focused on particular markets.
Last month Zhejiang Xingrun Real Estate in the wealthy eastern China city of Ningbo collapsed after being unable to repay RMB3.5 billion in debts.
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