China Aoyuan keeps target despite weak sales

PUBLISHED : Saturday, 12 June, 2010, 12:00am
UPDATED : Saturday, 12 June, 2010, 12:00am

Guangdong developer China Aoyuan Property Group says its contract sales only reached 22 per cent of its 5 billion yuan (HK$5.69 billion) goal for the first five months, but the company's target remains unchanged.

Investors are closely watching how developers deal with a raft of measures imposed by the central government to cool the property market.

Aoyuan had contract sales of 1.09 billion yuan from January to May, a 2.8 per cent rise from the same time last year.

'Most of our projects are scheduled to sell in the second half year,' said Aoyuan spokeswoman Renee Chen. 'It was the same last year.'

Aoyuan said its most high-profile development, Chang'an Ave, was now selling at an average of 60,000 yuan per square metre, 25 per cent lower than the initially-branded 80,000 per square metre.

Chairman Guo Ziwen explained that this was because the company was not selling its best properties at this point, but rather second-level properties.

Transaction figures for Chang'an Ave for the first five months were not available.

Guo said that he did not foresee a drop in property prices in the coming months, adding that he expected prices to remain stable for the rest of the year.

Barclays' analysts, in a report last week, predicted that prices may tumble 20 to 30 per cent in coming quarters as the government's recent measures to cool the housing market focus on limiting investment and increasing the supply of public and low-cost housing.

Guo said that the government's policies should have worked by now and that he expected fewer cooling measures in the next few months.

Meanwhile, developer Yuexiu Property Company said it had contract sales of 4.6 billion yuan in the first five months of this year, representing a year-on-year increase of 275 per cent.

Commercial building sales volume rose 38.4 per cent from January to May, according to the National Bureau of Statistics.

Slow growth

China Aoyuan made contract sales sales of 1.09 billion yuan in the first five months, up this much from the same time last year: 2.8%