Chinese property developers’ sales rise in the first quarter, helped by government support
Some mainland property firms’ sales more than double, first- and second-tier city momentum cited
Sales by property developers from mainland China jumped in the first quarter of this year after market sentiment improved on the back of government support for the sector.
Evergrande Real Estate said on Tuesday its sales in the first three months surged 115 per cent year-on-year to 65.7 billion yuan.
Competitors such as Shenzhen-based Logan Property and Fantasia Holdings, along with Shanghai’s Future Land Developement also reported strong sales recoveries in March.
“Sales momentum in first- and second-tier cities are picking up,” Kenny Chan, executive director at Future Land, said.
That company saw its sales climb 154 per cent to 11.4 billion yuan in the first quarter. Sales in March rose to a record 5.1 billion yuan.
Chan said projects in Suzhou and Nanjing contributed most to growth.
Logan Property said its two flagship projects in Shenzhen had greatly contributed to sales expansion.
China’s central and local governments cut taxes and rates while increasing subsidies to boost home buying. The aim was to buoy the market for unsold flats.
The cost of new homes in China’s 100 biggest cities rose an average 7.41 per cent annually in March. That is the fastest growth since August, according to China Real Estate Index System. Prices in Shenzhen in Guangdong Province rocketed 57 per cent and in Shanghai rose 20 per cent.
Anticipation of tighter controls on home buying in ‘hot’ cities has led some transactions to hit new highs.
Data from property agency Lianjia shows Shanghai last month deals, measured by space, surpassed 2 million square metres, its highest sales for March since 2006.
Central China Real Estate, a developer focused on Henan province said sales in the first quarter grew 40 per cent from a year ago to 1.6 billion yuan. Its full-year sales target is 18 billion yuan.
“There is still the pressure of an oversupplied market,” Chief Executive Chen Jianye said at the company’s annual results briefing on Tuesday. “Central-government efforts to deal with that problem stimulated sales in first- and second-tier cities. It will take effect in lower tier cities sooner or later. We are confident about achieving our sales target this year.”
Home prices will continue to grow significantly in big Chinese cities and declines in smaller cities may slow or reverse in the short term, the National Development and Reform Commission’s price monitoring centre said in a report on Tuesday.
It added the Shenzhen market might have some cool because of the local government’s crack down on market speculators.
China’s central government attempted in March to control housing prices in cities such as Shanghai and Shenzhen where they have been seen as rising too fast. Measures have included rasing down payment requirements and extending the length of time someone has to work in a city before buying property. In cities such as Haikou, Shenyang and Ningbo, subsidies have been introduced to encourage local home purchases.
“The policies are expected to support steady and healthy developement of the property market across the country, ” said developer Fantasia.