China Overseas Land’s contracted sales drop 45pc despite lifting of curbs

PUBLISHED : Thursday, 14 August, 2014, 9:37am
UPDATED : Thursday, 14 August, 2014, 10:43am

China Overseas Land and Investment said contracted sales plunged 45 per cent last month from the previous month to HK$9.32 billion, a possible sign that a relaxation in housing policies on the mainland has failed to stimulate demand.

Hong Kong-listed China Overseas Land is the biggest mainland developer by market value.

The firm’s contracted sales volume fell to 646,100 square metres from 1.18 million square metres in June and 670,000 square metres in July last year.

The state-owned developer kept its annual sales target at HK$140 billion.

Core profit for the first half of the year jumped 33.7 per cent from the same period last year to HK$10.79 billion, the firm said in its interim report on Wednesday.

Most mainland cities have relaxed purchase restrictions to allow local and non-local residents to buy more than one home. The impact has yet to be seen as mortgage loans remain expensive despite repeated calls from banking regulators and local authorities for more support to be given to buyers of first homes.

Curbs remain in place in Beijing, Shanghai, Shenzhen, Guangzhou and a few other cities.

In the first seven months, contracted sales fell 9 per cent from last year to HK$82.36 billion. That means China Overseas Land will have to post average monthly sales of HK$11.5 billion in the August-December period to hit its target.

By the end of last month, the company had HK$6.27 billion in subscribed sales, which were expected to be turned into contracted sales in the following months, it said.

Last month, China Overseas Land, together with its subsidiaries, bought two land parcels in the northern port city of Tianjin and Wuxi in Jiangsu province. The combined premium paid by the group was 4.5 billion yuan (HK5.7 billion), the firm said.