China unit of Hong Kong’s New World reports US$1.37 billion in home sales, among few bright spots in mainland property sector

Developer’s projects have ‘gained strong market recognition and achieved steady growth’, executive says
About 40 per cent of sales recorded by China unit NWCL in the first eight months of 2023 were recorded in July and August: New World

China property

Cheryl Arcibal

Published: 9:00pm, 4 Sep 2023

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New World Development, the conglomerate owned by one of Hong Kong’s wealthiest families, sold more than 10 billion yuan (US$1.37 billion) worth of residential projects in mainland China in the first eight months of the year, the company said in a statement on Monday.

The total sales reported in this period catapulted New World China Land (NWCL), its China unit, into the ranks of the mainland’s top 100 developers, New World said citing three real estate think tanks.

The Greater Bay Area (GBA) and the Yangtze River Delta markets contributed 91 per cent of NWCL’s revenue in this period, a positive development for its Hong Kong-based parent, which has about 21 per cent of its total assets deployed in the GBA development zone.

“Benefiting from the group’s forward-looking strategy, high-quality developments and brand advantages, our projects have gained strong market recognition and achieved steady growth,” said Echo Huang, executive director of New World and CEO of NWCL. “With a sufficient supply of projects in the GBA and the Yangtze River Delta, the group is confident about maintaining sustained future growth.”

About 40 per cent of the sales made by NWCL in the first eight months of 2023 were recorded in July and August, and amounted to 4.1 billion yuan, a 138 per cent year-on-year increase, the company said.

The developer’s contracted sales for residential projects in July and August have been among just a handful of bright spots in China’s residential property market in recent weeks, with prices of new homes falling 0.2 per cent in July from June, according to official data.

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Of the 70 cities tracked by the National Bureau of Statistics, only 20 registered an increase in new home prices in July – compared with 31 in June – while prices of second-hand homes rose in only six cities. In June, the prices of second-hand homes were flat.

Beijing’s latest property stimulus measures, however, are likely to help the flagging mainland Chinese property market. These measures include: preferential mortgage rates for first-time homebuyers in several first-tier cities, regardless of their previous credit records; minimum down-payment ratios set at no less than 20 per cent for first homes nationwide; and a minimum down-payment ratio for second homes set at no less than 30 per cent.

“The group believes that developers focusing on high-quality projects, such as NWCL, will benefit from new opportunities under the new market conditions,” New World said.

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Among projects that the group has launched this year is the New Metropolis Mansion in Guangzhou, in China’s southern Guangdong province, a transit-oriented complex being developed in collaboration with Guangzhou Metro. Located above the Hanxi Changlong station, it integrates rail transport, retail zone K11 Select, residential areas, communities and an urban green space. Launched in March, the project has so far netted more than 2.5 billion yuan in sales. The project’s full opening is scheduled for May 2025.

The developer is also set to launch the Baietan project in Guangzhou, which is expected to be released by the end of this year. The first phase of Hangzhou’s New World Arts Centre is also set to be launched by the end of this year.

In 2022, New World recorded HK$11.5 billion (US$1.46 billion) in revenue in mainland China, according to its annual report.

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