Property counters outpace losses in China stock market
Large amounts of money flowing back to the general market as structural distortion in land supply is criticised
A number of real estate stocks in China on Wednesday defied the overall market by hitting their daily trading limits before the market retreated slightly in the afternoon.
Greenland Holdings, Tieling New City and China Fortune reached their daily 10 per cent upper limits in morning trade. Greenland’s rally corrected in the afternoon to eventually close 6.98 per cent up. The other two stocks closed at nearly 10 per cent higher. The market as a whole finished down 0.22 per cent.
These stocks were boosted by large inflows of money. A Citic Securities report noted that the rally was driven by the flow of capital into the general market. Liquidity is moving from the property market to the stock market after the government clampdown on the country’s property market.
Meanwhile, at a forum in Beijing forum on Wednesday, Chongqing’s example over how to tame the property market was touted by industry insiders as better than just curbs on home buying to cool runaway housing prices.
“There is a Chinese major city that neither imposes restrictions nor curbs home prices, while average home prices in the past five years have risen only 12 per cent,” Meng Xiaosu, director-general of State-owned China National Real Estate Development Group Corp, told a forum organised by news portal sina.com.
Huang Qifan, mayor of the mega city with a population of 33 million, has been widely regarded as an economic and financial maverick who anchored the city’s land policy for the past 15 years.