Longfor property sales drop 40pc

PUBLISHED : Thursday, 27 May, 2010, 12:00am
UPDATED : Thursday, 27 May, 2010, 12:00am

Mainland developer Longfor Properties has seen its contract sales drop by 40 per cent to 1.5 billion yuan (HK$1.7 billion) so far this month from April as buying interest is dampened by central government efforts to cool the market.

The firm has sold 2.5 billion worth of properties in April.

'With the market clouded by the uncertainties, property sales for the next two to three months will remain unchanged,' chairwoman and chief executive Wu Yajun said.

However, Wu said the developer had no immediate plans to offer discounts to perk up buying interest.

Some developers have offered discounts in response to a sharp fall in sales since the April 16 crackdown on credit to the housing market, with measures that included higher initial down payments and tighter loan conditions for buyers of second homes.

Guangzhou-based Evergrande Real Estate Group fired the first salvo in the latest discount war on May 5 when it said it was slashing prices in 40 projects in 20 cities by 15 per cent.

Other developers followed suit and prices of units in projects being launched in Shanghai, Beijing and Nanjing have been cut by as much as 19 per cent.

Wu said the firm would release more projects in cities less affected by the austerity measures.

She said property prices in the western region remained stable with sales mainly driven by end-users.

Wu declined to comment if she thought Beijing would impose tougher measures in coming months, although she believes measures to contain spiralling home prices have started to take effect.

She is confident Longfor will achieve its 24.8 billion yuan sales target this year.

On land acquisitions, Wu said the firm was actively looking for opportunities but its land bank was sufficient to cover the next five to seven years.

Shares of Longfor increased 3.48 per cent to close at HK$7.72.