China - Housing 01 (May 08 - May 10)

Re: China - Real Estate 1 (May 08 - May 10)

Postby winston » Sun May 16, 2010 2:50 pm

China's property moves leave buyers in limbo

Accountant Jiao Yurong carefully organised her family's finances to put her son through university in the United States. Now that he has the coveted degree, she has been saving to buy him a flat.

But soaring property prices in China -- and a series of moves by the government to rein them in -- are throwing a spanner in the 50-year-old mother's plans, and she admits she does not know how to proceed.

"Just when we had saved enough for a down payment, prices surged," Jiao, a Beijing resident, told AFP.

"The policy is so unstable... I'm so confused."

Jiao is not alone. Prospective home buyers are reeling from a series of measures put in place by the Chinese government to curb rocketing prices amid persistent fears about a ballooning bubble in the real estate sector.

Authorities have tightened restrictions nationwide on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down payments for second homes.

The Beijing city government has gone even further, limiting families to one new apartment purchase and barring people who have not paid taxes or made social security contributions in the city for one year from getting home loans.

"Sellers have started to lower the prices," said Hu Jinghui, vice general manager of 5i5j, a real estate agency chain that has around 600 outlets in eight cities across China.

"But the buyers are still waiting."

At the Beijing Real Estate Expo last month, the average price of a new apartment in the city was around 21,164 yuan (3,100 dollars) per square metre, double that of last year, state media said.

That means a 90-square-metre (970-square-foot) apartment in Beijing would cost 1.9 million yuan, compared with the average per capita income of 26,738 yuan in 2009.

Since the capital put in place the austerity measures on April 30, prices have dropped an average 10-15 percent, with the number of home purchases slumping by 50 percent, according to Hu.

Jack Guan, a securities firm executive from the coastal city of Qingdao, searched last year on the outskirts of Beijing for his first home, but said he could not make a deal as prices "went insane".

"I am going to wait and see. I think this is an approach that many people have adopted as now there is a possibility for a price cut," said the 27-year-old.

"It will not cost me much if I wait for another two years."

In 2008, China also introduced a range of policies to dampen the market frenzy, but a government stimulus package to prop up the economy during the financial crisis quickly negated any progress made.

The new measures so far seemed to have had a limited effect, as official data showed Tuesday that prices in major Chinese cities rose 12.8 percent in April, a double-digit rise for the third straight month.

Experts also said the rules contained apparent loopholes that could be exploited by speculators.

China lacks a nationwide database on property sales, which means banks have no way of checking if mortgage applicants already own apartments in other cities.

And higher down payments will have little impact on speculators who mostly pay the full value of properties in cash.

State media reported Friday that people are even briefly resorting to divorce to acquire a second property, taking advantage of lower down payment and interest rate benefits offered to first-time buyers before remarrying.

Jiao said she was often told the properties she was interested in were sold out, leading her to suspect the developers were hoarding to keep prices high.

"The government has always been saying they would keep the policy unchanged. But they changed it whenever they wanted. We ordinary people just cannot do anything," she said.

Hu however said he believed the government was more determined this time around to hold firm, as prices had become so out of reach for many ordinary Chinese that the measures were needed to keep a lid on social discontent.

Lina Wong, managing director for east and southwest China of real estate firm Colliers International, said even more tough measures could be expected as curbing price rises had become a "political task" for the ruling Communists.

New rules could include a property tax on residential housing to increase the costs for buyers keeping multiple apartments.

The government could also "raise the capital requirements for development or even restructure the fiscal revenue system of local governments to reduce (their) vested interests in land sales", Wong said.

Despite the market chaos, Guan said he was determined to buy, even though he would need his parents' help for the down payment and a tight budget to pay off his mortgage.

"I will not feel that my life is stable unless I have my own apartment," he said. "I will have to buy one before I get married."

Source: AFP Global Edition
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Re: China - Real Estate 1 (May 08 - May 10)

Postby millionairemind » Wed May 19, 2010 5:48 pm

May 19, 2010, 5.42 pm (Singapore time)

China property prices have stopped rising: NDRC


BEIJING - Chinese property prices have stopped rising and transaction volumes have dwindled since the middle of last month, the country's top economic planner said on Wednesday.

Prices will remain high, neither rising nor falling much, in coming months with the market entering a 'wait-and-see period', the National Development and Reform Commission (NDRC) said in a statement on its website.

China has introduced a slew of measures, such as higher downpayment requirements and higher taxes, to rein in the red-hot property sector and control speculative buying.

The average price of newly built residential houses in 36 major cities rose 3.7 per cent in April from a month earlier, the NDRC said.

April's figure was well above rises of 1.1 per cent in March and 2.6 per cent in February. But the NDRC said prices in the second half of the month had stopped rising, after an April 15 announcement by the government that it was raising downpayments and mortage rates on some home purchases.

'The property transaction volume has shrunk and prices also stopped rising from the fast growth momentum in the first half of April, after the government launched the property tightening measures,' it said.

The price of land used for residential houses in 70 major cities was down 3.4 per cent from a month earlier, according to China Index Academy, a unit of Soufun.com, a top real estate portal in China. -- REUTERS
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Re: China - Real Estate 1 (May 08 - May 10)

Postby winston » Mon May 24, 2010 11:55 am

Not vested.

DJ MARKET TALK:BoA-ML Recommends China Developers With Ample Cash

1127 [Dow Jones] STOCK CALL: Bank of America-Merrill Lynch says Chinese property stocks have suffered devastating blows, with average share price falling 18%, due to central, local governments' toughest tightening policies ever in country's history on April 15.

Thinks policy risks, physical market weakness largely priced in, expects winners to emerge from this downturn. House prefers developers with ample cash flow and strong execution capabilities that can continue to achieve robust presales despite market weakness.

House top picks are Renhe (1387.HK), COLI (0688.HK), CR Land (1109.HK), Shanghai Industrial (0363.HK), and Evergrande (3333.HK).

Source: Dow Jones Newswire
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Re: China - Real Estate 1 (May 08 - May 10)

Postby winston » Tue May 25, 2010 6:51 am

Not vested. From Dr. Check, The Standard HK:-

Beijing is doing its best to curb property prices. But the share prices of many locally listed mainland developers are between 20 and 70 percent below their 2007 peaks.

Based on people's affordability, there is a housing bubble in China. So, it is natural for the property market to have a correction.

But the stock prices of mainland developers should not have much downside as many negative factors have already been discounted. Wait now for a better level to enter the market. The upside potential is huge as mainland property prices may rise for another 10 years after a correction.

Dr Check likes China Overseas (0688) and Shimao Property (0813). They have big land banks in major cities.

Brokers mostly like China Resources Land (1109), Shui On Land (0272) and KWG Property (1813). So let's concentrate on these five, though there is no hurry to buy.

http://www.thestandard.com.hk/news_deta ... 00525&fc=2
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