Developer expects prices to rise in downtown areas
Shanghai Real Estate expects local residential property prices to edge up 5 per cent in downtown areas even though Beijing is trying to cool the sector.
The Hong Kong-listed company expects Guangdong's property market and especially Shenzhen to be unaffected by any tightening measures as local property prices continue to edge up, according to executive vice-president Yu Hai Sheng.
'There is a lack of land supply in Shanghai's downtown area in the past two years,' Mr Yu said yesterday.
However, he noted there was land supply of about 20 million square metres in suburban Shanghai in which the local government aimed to relocate residents affected by urban renewal. Mr Yu expected property prices in these areas to fall.
'Overall, Shanghai's property prices will remain stable this year.'
Mr Yu also said the central bank's interest rate rise late last month had not dampened home seekers' interest in Shanghai.
This was illustrated by the better-than-expected sales performance of Albany Oasis Garden, the group's biggest project this year, during the Golden Week holiday.
'We launched the second block of Albany last week. Because of the interest rate increase, we expected to sell 30 residential units during the week but it turned out that 45 units were snapped up,' he said.
The People's Bank of China raised its benchmark one-year lending rate last month by 27 basis points to 5.85 per cent in an attempt to tighten credit policy. Home mortgages rose accordingly.
Albany, which has a profit margin of between 20 per cent and 25 per cent, is fetching about 17,500 yuan to 18,000 yuan per square metre.
The group expects to sell three blocks of Albany this year out of the 19 blocks in total and expects to realise one billion yuan as a result.
