China's apparent property recovery
Sales of new residential buildings in the first quarter rose by more than 100 percent on a yearly basis, the China Daily reported today, as China’scash-strapped property developers were forced to drop the prices of their large inventories. Now, weeks later, prices have apparently gone up again.
And transaction volumes in Beijing and Shanghai have nearly reached the peak levels of 2007, according to property transaction websites.
Poly Real Estate (SH:600048), China’s largest listed state-owned property developer, rose 3.27 percent today.
China Vanke Corp (SZ:000002), the country's largest publicly listed developer, said income rose 21 percent in the first quarter of this year. Square-footages sold, however, rose only 33.2 percent, indicating a nearly 10 percent cut in prices.
However a straw-poll of Beijing property agents by Proactive Investors revealed that significant price reductions on home sales have been non-apparent.
The currently explanation circulating to explain the reported price drops in the first quarter is that developers sold bulk quantities of newly-built appartments to large state-owned enterprises at high discounted rates, while still refusing to budge on published prices.
Analysts are pessimistic that even published prices will remain so high in the medium term. Denis Ma, head of Research of Jones Lang LaSalle (JLL) Beijing yesterday told local media: "I believe a full recovery would happen only in the second half of 2010."
Meanwhile,
Shanghai has started bundling state-owned property projects into a real estate investment trust (REIT) totaling RMB 5 billion, reports 21st Century Business Herald. The trust will probably begin trading in the third quarter of 2009, with China's REIT market likely to grow to RMB 1 trillion in the next five years.
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