Real estate speculators hoping for signs of a return to the free-wheeling days of 2009, will have to wait a while longer, according to Freddy Lee, CEO of Hong Kong-based property developer Shui On Land.
Speaking to Bloomberg TV about demand for housing, Lee predicted that conditions in China’s property market in 2012 would remain much the same as in 2011.
“We don’t believe that all of these austerity measures will be lifted within the next 12-18 months, until the new leaders are coming on stage,” Lee noted. This point of view echoes the more pessimistic tone recently heard from other developers, including SOHO China’s previously bullish CEO Zhang Xin.
When the restrictions are lifted, however, Lee appeared to be painting a picture of a rapid return to property price increases, driven by large amounts of liquidity in the market. In the case of Shui On, “One third of our buyers are paying with cash,” Lee pointed out, backing this up with an estimate of Chinese savers having RMB 78 trillion socked away in savings accounts.
So for Shui On, it appears to be a case of hunkering down until the government transition is completed, and then reaping greater returns when the current austerity measures are lifted.
Shui On is best known for its Xintiandi development in Shanghai and has gone on to develop a number of similarly themed mixed use real estate projects across China including developments in Wuhan, Chongqing, Hangzhou, Dalian and Foshan. (Contrary to popular belief, Xintiandi was not named after Mingtiandi).