A possible slowdown or even a downturn in the mainland property market will not deter ING Real Estate Investment Management from continuing to invest on the mainland because it believes genuine demand from end-users will support the market's long-term growth, the company said.
Policy measures to curb runaway property prices have begun to bite, with the month-on-month rise in average house prices slowing to 0.2 per cent last month from 0.8 per cent in November and 1.6 per cent in October, government figures show.
In more overheated markets such as Shenzhen and Guangzhou, prices have reversed, falling 1.4 per cent and 0.1 per cent month on month respectively.
'I think 2008 will be more difficult for developers than last year,' said Richard van den Berg, the managing director of ING Real Estate Investment Management.
Mr van den Berg believes that while measures taken to damp housing demand would depress home prices, intensifying competition among a larger number of players entering the market at a time when land supply is set to decline is likely to boost land prices, squeezing developers' margins.
Nevertheless, the tougher environment would offer opportunities for investors with financial strength and a longer investment horizon, such as ING, he said. Also, a slowdown in price rises would be good for the market's more stable long-term development, he added.