Property plays slump as home prices decline

PUBLISHED : Tuesday, 13 January, 2009, 12:00am
UPDATED : Tuesday, 13 January, 2009, 12:00am

Hong Kong-listed mainland property stocks fell sharply yesterday because the housing market was facing a lack of stimulus in the short term and home prices were continuing to weaken, market watchers said.

Agile Property Holdings led the retreat with a drop of 14.32 per cent to close at HK$3.35, while Guangzhou-based KWG Property Holding fell 12.39 per cent to HK$1.91 and Shimao Property Holdings shed 10.71 per cent to HK$4.75.

Hopson Development Holdings fell 9.75 per cent to HK$4.72 and Guangzhou R&F Properties dropped 9.42 per cent to HK$7.21.

Home prices in 70 mainland cities fell an average of 0.4 per cent last month from December 2007, official figures show. It was the first decline in 3? years and analysts forecast prices would fall further amid the slowing economy and weak confidence.

Securities house ICEA said in a report that there was still concern of oversupply in Beijing, with unsold residential inventories totalling more than 146,000 units on Friday, up from 90,000 early last year.

'Based on the recent monthly selling progress at below 1 million square metres, we estimate it needs over 20 months to digest the excess units,' said the report, adding that a 20 to 30 per cent price fall, especially in non-core areas, would be the most effective way to digest inventories.

Most major property plays listed on mainland exchanges were relatively stable along with the quiet market, except for Shanghai Waigaoqiao Free Trade Zone Development, which rose the 10 per cent daily limit for three trading days, to close at 10.52 yuan (HK$11.93), buoyed by rumour that it will be involved in the Disney project to be built in Shanghai.

Shanghai Lujiazui Finance and Trade Zone Development, another firm rumoured to be involved in the project, fell 1 per cent to 16.92 yuan after rising the previous two trading days.

Waigaoqiao said it had not been told that it and its parent firm would participate in the project. Lujiazui also denied any involvement.

Big mover

Mainland builder Agile Property leads the retreat with a drop of: 14.3%