China Overseas expects double-digit growth

Despite measures to cool mainland housing market, developer is confident about 2013 profits

PUBLISHED : Friday, 22 February, 2013, 12:00am
UPDATED : Friday, 22 February, 2013, 5:29am

China Overseas Land & Investment is sticking to its target of achieving double-digit growth in profits and property sales this year although it does not expect mainland price-cooling measures to be relaxed, chairman Kong Qingping said yesterday.

His remarks came a day after the State Council launched five measures to try to curb revived speculation in residential property. Analysts said the measures were moderate, as they mainly reiterated existing ones.

"The measures signalled that the government would not loosen its tightening policy this year," Kong said.

"As a result, the market performance this year will be more or less similar to last year's."

Developers will face opportunities and challenges in such market conditions, he said. As one of the biggest players in the industry, Kong sees more opportunities than challenges.

"We will try to use different strategies to achieve our target of double-digit growth in earnings and sales this year," he said.

Wednesday's measures included extending the trial property tax beyond Shanghai and Chongqing; setting annual home price targets in all provincial capitals; increasing residential land supply; tighter control over presales and improving the housing information system; and speeding up construction of social housing.

The only new measure is the widening of the property tax trial to more cities, but the market fears the introduction of a nationwide property tax, a report by Credit Suisse said yesterday.

Bank of America Merrill Lynch said in a report yesterday that the announcement signal- led that leaders are seriously concerned about rapidly rising home prices and will step up enforcement of existing measures.

"It's likely they will introduce new measures contingent on the future pace of home price increases," the report said.

But the report said some lower-tier cities on the mainland are faced with oversupply, while in some top-tier cities, especially Beijing, undersupply of new homes is worsening.

"Due to the divergence between high-tier and low-tier cities, we believe new property demand curbs, if any, will likely target a few specific cities, rather than covering the whole country," Bank of America Merrill Lynch said.