China Resources Land sales fall in wake of tighter curbs
Mainland developer China Resources Land says its property sales fell slightly this month after the central government further tightened curbs on the housing market.
CR Land posted a 30 per cent increase in net profit last year to HK$10.57 billion, after taking into account a HK$4 billion revaluation gain on investment properties.
Given the impact of the central government's new measures announced on March 1, chairman Wang Yin said daily contract sales were 180 million yuan (HK$224 million) in the first 10 days.
"On normal days, the average daily contract sales were 200 million yuan," Wang said.
The latest government measures were the toughest imposed in a year, which include increased down payments and interest rates for second mortgages in cities with excessive price gains, enforcing a property sales tax, and tightening home-purchase limits.
Individual sellers are also subject to a 20 per cent tax on profits if the original purchase price is available, a levy that is being easily avoided.
In response to the market change, Wang said CR Land had allocated 85 per cent of its land for mass residential projects to cater for first-time buyers.
"Our products are still in solid demand at a time when investment demand has been dampened by the austerity measures," he said.
Revenue rose 23.9 per cent to HK$44.36 billion last year but gross profit margin fell to 37.6 per cent from 39.6 per cent in 2011.
The board recommended a final dividend of 27.3 HK cents a share, against 16.6 HK cents a year earlier.
Separately, Longfor Properties reported a 20 per cent increase in core profit last year as it readjusted its product mix by targeting first-time home buyers, reduced unit sizes and outer-suburban housing products in response to the government measures.
Excluding minority interest and revaluation gain, core earnings amounted to 5.4 billion yuan.
Turnover rose 16 per cent to 27.89 billion yuan.
A final dividend of 20 fen per share will be paid, compared with 17.5 fen previously.
Gross profit margin of overall property development business fell slightly to 39.7 per cent.