China Overseas Land confident after 11pc growth in mainland
China Overseas Land & Investment chairman Sun Wen-jie says the mainland property market is showing signs of recovery with property sales jumping more than 11 per cent in the first eight months of last year.
Mr Sun said, however, there remained a large gap between potential demand and actual demand with properties covering about 645 million square feet remaining vacant.
While there was oversupply in the market, demand had also increased for properties as mainlanders wanted to improve their living standards, the China Overseas chief said.
Mr Sun, speaking at the Asia Property Summit, said a survey indicated more than 30 per cent of urban households in developed metropolitan areas in the mainland were planning to purchase new homes in the next three to five years.
Another three million households needed to purchase homes and there was 359.5 million sq ft of residential space in need of improvement, he said.
The development of a home financing system would open up the vast potential of the real estate market, which would especially be the case for cities such as Beijing, Shanghai, Guangzhou and Shenzhen, Mr Sun said.
'These areas are expected to play a leading role in the development of the market,' he said.
'Home mortgages will speed up real estate development in the mainland.' There was $400 billion worth of mortgage finance provided in Hong Kong in 1996, Mr Sun said.
This compared with 200 billion yuan (about HK$186.1 billion) in the mainland, he said.
'There is a lot of room for improvement in that market.'