China - Housing 05 (Jul 16 - Oct 21)

Re: China - Housing 05 (Jul 16 - Dec 18)

Postby winston » Wed Mar 21, 2018 8:11 am

Chinese developers report strong profits but credit curbs could spell trouble

Developers’ financial results usually lag one or two years behind their current contracted sales, so the impressive 2017 results reflect strong contracted sales in 2015-16.

China’s government has introduced a string of measures since last year to cool the property market, including restrictions on house-purchase eligibility, loans and selling prices.

The prospect of further policy curbs and credit tightening are a big concern for the sector. Some developers are reporting difficulty in obtaining bank loans, and mortgage rates have kept rising; a year ago most banks in China offered a 10 per cent discount for first-time home buyers, whereas now most are asking for a 10 per cent premium over the benchmark interest rate.

Despite the heavy curbs, he doesn’t see much chance of developers cutting selling prices in first-tier cities. He is concerned about the sustainability of the sales surge that has been seen in third- and fourth-tier cities in 2017. They now make up three fifths of China’s total home sales.


Source: SCMP

http://www.scmp.com/property/hong-kong- ... urbs-could
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 18)

Postby winston » Tue Apr 03, 2018 8:13 am

China’s top three developers see sales slow in first quarter

Country Garden, Evergrande and Vanke head up list of top 100 developers, says leading research agency, with total Q1 sales rising 29pc to 1.95 trillion yuan

Source: SCMP

http://www.scmp.com/property/hong-kong- ... st-quarter
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 18)

Postby behappyalways » Wed Apr 18, 2018 7:56 pm

China may be headed for rare property defaults, Neuberger says
https://www.theedgesingapore.com/china- ... erger-says
血要热 头脑要冷 骨头要硬
behappyalways
Millionaire Boss
 
Posts: 39929
Joined: Wed Oct 15, 2008 4:43 pm

Re: China - Housing 05 (Jul 16 - Dec 18)

Postby winston » Mon Apr 23, 2018 7:40 am

Chinese housing demand robust in first quarter despite efforts to cool market

New mortgages hit 1.9 trillion yuan in first three months, up 11.8 per cent

Chinese banks extended 1.9 trillion yuan (US$302 billion) in new property loans during 1Q. That was up 11.8 per cent from the same period in 2017.

Home prices went up by 0.1 per cent in first-tier cities such as Beijing, Shanghai and Guangzhou, while those in second-tier cities went up 0.4 per cent. In the third- and fourth-tier cities, prices rose by 0.3 per cent.


Source: SCMP

http://www.scmp.com/business/article/21 ... ool-market
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 18)

Postby winston » Mon May 28, 2018 8:52 am

Why China’s property market won’t crash for now

According to a latest survey from analysts at global bank BBVA, a 10 per cent drop in Chinese property prices could cause a 1 per cent decline in gross domestic product growth in the short term.

A 15 to 20 per cent property price drop could lead to recession,


An updated report released by an International Monetary Fund last month showed average home prices in 100 major cities in China rose 16.6 per cent in September 2016 alone, compared with the year before.

Source: SCMP

http://www.scmp.com/business/global-eco ... -crash-now
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 19)

Postby winston » Wed May 30, 2018 9:50 am

China Property: Build it and they will come

While the broader residential market in China has taken a breather, many listed developers have seen pre-sales growth running at a healthy clip YTD, likely at the expense of smaller (unlisted) players in this current climate of consolidation.

A number of these listed names have also positioned their land banks towards certain key economic regions, such as the Greater Bay Area (GBA), Yangtze River Belt and the Beijing-Tianjin-Hebei integration area, which, over time, should see developments that will be structurally supportive towards end-user demand for real estate.

Developers with heavy exposure to the GBA, in particular, should witness a re-rating on the back of anticipated policy announcements due soon, in our view.

We initiate coverage on Agile Group [BUY; FV: HK$17.00], Shimao Property [BUY; FV: HK$27.18], and Sino-Ocean [BUY; FV: HK$6.34], as we believe that the composition of their land bank, as well as their sales execution abilities and undemanding valuations should result in sector outperformance.

Source: OCBC
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 19)

Postby winston » Mon Jun 11, 2018 5:30 am

Restrictions failed to stop mainland's property punters

by Ivan Tong

Although China's central and local government have brought in several regulations to try and control the market such as purchase restrictions and limits on loans, several mainland developers posted record contracted sales this year.

Going by contracted sales of land, sales hit 1.5 trillion yuan (HK$1.85 trillion) in the first five months of 2018, up nearly 60 percent over the same period last year.

The irony is despite China's principle that "a house is for living, not for speculation" the very reverse - "a house is for speculation, not for living" - has become the reality today.

In addition to demand in hotspots such as Chengdu and Hangzhou, there are tens of thousands of people lining up to buy property in "notspots" such as Xi'an and Nanxing.

It is obvious that China's efforts to rein in the market have failed.

China's cities, both large and small, tried hard to stabilize property prices because their planners understood what the central government was striving to achieve. Some even offered property purchasing benefits for migrants who moved their hukou, in a bid to cool the market and lower prices.

Though the bubble is getting bigger, prices can't keep growing forever. No one, though, can forecast when the bubble will burst.

Hong Kong-listed mainland property developers have been driving the Hang Seng index's rise of late, due to better-than-expected contracted sales, but their stock performance over the past year has just been allright. For example, China Evergrande Group (3333) has not seen much movement lately, and other heavyweights such as Country Garden Holdings (2007) and China Vanke (2202) have stayed around their average price.

The reason why stock prices of mainland developers can't keep up with runaway property prices is that investors are still cautious about China's deleveraging policy. For instance, Country Garden failed to issue bonds a few weeks ago.

Ronshine China Holdings (3301), a medium-sizes real estate developer, saw its stock price escalate after it raised funds through a share allotment, and other developers might follow suit.

Investors prefer to be shareholders rather than a bondholder, as the risks of trading shares in the short-term is still far lower than that of holding long-term bonds.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0611&sid=2
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 19)

Postby winston » Tue Jun 26, 2018 7:46 am

China’s latest policy for deflating the property bubble merely buys time, instead of offering relief

by Christopher Balding

Real estate is the driver of the Chinese economy. By some estimates, it accounts (directly and indirectly) for as much as 30 per cent of gross domestic product.

Despite reforms in recent years, there’s little question that Chinese real estate is in bubble territory. From June 2015 through the end of last year, the 100 City Price Index, published by SouFun Holdings, rose 31 per cent to nearly US$202 per square foot.

That’s 38 per cent higher than the median price per square foot in the United States, where per-capita income is more than 700 per cent higher than in China. Not surprisingly, this has put home ownership out of reach for most Chinese.

Worried about these prices, and about growing indebtedness among developers, China’s State Council has hatched a plan to encourage rentals. It will offer tax breaks to developers that rent out some of the housing they planned on selling, and will prod financial institutions to “provide support for companies in the residential rental sectors.”

This is a thoroughly misguided way to address the problem.

For one thing, rental yields in China are extremely low. In big cities, such as Beijing and Shanghai, yields are hovering around 1.5 per cent (compared to an average of about 3 per cent in the US and 4 per cent in Canada).

Wages in China simply aren’t high enough to keep up with the credit fuelled rise in asset prices, and thus developers can’t earn a reasonable rate of return by renting out units. A tax break won’t fix that.

Worse, developers are heavily weighted down with debt, much of it short-term. Many are paying out 7 to 8 per cent bond yields, with debt-to-equity ratios of around 380 per cent. Encouraging them to rent out their housing surplus thus drives a money-losing trade: Developers rent to consumers to make a 1.5 per cent yield, while paying a combined debt-and-equity cost of capital of almost 10 per cent.

That 8.5 per cent negative yield multiplied by millions of units amounts to an enormous subsidy for renters, but it significantly worsens developers’ debt problems. Actively encouraging this is not exactly standard economics.

Could a simple change of name get real estate investment trusts off the ground in China?

These problems are compounded by the way rental agreements are structured in China. Typically, renters borrow from banks to make an upfront, one-time payment to developers that covers, say, five years.

But they can repay that loan over as many as 10 years. The upfront payment from the bank to the developer provides some short-term cash-flow relief. But otherwise, all it does is delay debt repayments attached to the unit and shrink the loss on unsold inventory.

Underlying all this is the simple fact that China can’t allow real-estate prices to decline significantly. Politically, homeowners have come to expect their property values to rise continually in a one-way bet; reforms that threaten this dynamic have even led to rare protests.
Given that household lending now makes up 22 per cent of financial-institution assets, a reset in housing prices would also carry serious financial risks.

Rather than run those risks, China is simply ramping up development. New starts and land purchases have grown strongly through the first five months of 2018. Investment in residential real estate is up 14 per cent and development loans are up 21 per cent. Far from reducing leverage, banks are jumping back into the speculative bubble: Mortgage growth is now at 20 per cent.

The most direct way to deflate this bubble is to slow lending. That could mean increasing required down payments even further, raising the capital risk weighting on real-estate assets for banks, or simply setting a hard cap on new loans. But without a significant slowdown in the growth of credit flowing into real estate, no amount of tinkering by regulators will make much difference.

In fact, by accelerating real-estate lending while encouraging banks and developers to subsidise renters, the government is making things worse by delaying a restructuring. Developers will worsen their debt load. Consumers will be burdened with longer rent-repayment terms. And new homes will remain as unaffordable as ever, even as added inventory comes on the market.

At best, this latest plan will buy time. But this raises the all-important question: For what?

Source: SCMP

http://www.scmp.com/business/china-busi ... erely-buys
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 19)

Postby winston » Thu Jun 28, 2018 3:30 pm

NDRC Mulls Ban on Short-term Bond Issue of CN Developers: Report

National Development and Reform Commission (NDRC) is mulling over a ban on Chinese property developers to limit their USD bond issues of less than one year, Bloomberg cited sources.

Since last year, quite a number of developers have been issuing less-than-one-year overseas bonds to avoid approval procedure of NDRC.

Source: AAStocks Financial News
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118530
Joined: Wed May 07, 2008 9:28 am

Re: China - Housing 05 (Jul 16 - Dec 19)

Postby behappyalways » Thu Aug 09, 2018 6:46 pm

FEATURE-In China's debt-laden Xiamen, real estate boom chokes consumption
http://news.trust.org/item/20180725071553-79kt4/
血要热 头脑要冷 骨头要硬
behappyalways
Millionaire Boss
 
Posts: 39929
Joined: Wed Oct 15, 2008 4:43 pm

PreviousNext

Return to Archives

Who is online

Users browsing this forum: No registered users and 6 guests