Poly suddenly got hot yesterday
Poly Real Estate led China’s major real estate developers in a sudden stock rally following reports in the official media that two of China’s largest second-tier cities would be relaxing restrictions on home purchases.
The Guangzhou-based property firm was up 7.01 percent today to RMB 8.24 per share after the Shanghai Securities Journal reported that the cities of Hangzhou and Changsha would ease rules that limit the number of homes that an individual could purchase. Evergrande Real Estate was up 1.57 percent, China Overseas Land & Investment was up 3.19 perent and Gemdale Corporation was up 2.75 percent.
The Hang Seng Properties Index, which tracks real estate firms listed on the Hong Kong exchange, was up 3.67 percent for the day.
The Securities Journal did not name the sources for their story.
Separating the Overbuilt from the Crazy Overbuilt
The government has indicated in recent months that it wished to be more flexible in the application of real estate policies to allow for the differing environments among China’s communities. While home prices have begun to grow in the first-ticr cities, many smaller cities are reported to be oversupplied. Still, there have been no concrete indications of whether any specific policies would be relaxed or removed.
Developers in Hangzhou began discounting homes in February, and the prosperous capital of eastern China’s Zhejiang province is rapidly becoming known for having one of the country’s most bloated real estate bubbles.
During 2012 when many cities strained under the stress of slowing real estate markets local governments such as Shanghai and Wuhu attempted to skirt central government property market restrictions, only to be quickly brought into line by the authorities in Beijing.
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