China Property Market

China's Shandong to Buy Unsold Homes Amid Property Downturn
http://www.bloomberg.com/news/articles/2...y-downturn

By Ambrose Evans-Pritchard

5:02PM BST 20 Sep 2015


House sales are rising at an explosive pace in China across most regions of the country as stimulus measures kick in and the Communist authorities launch yet another cycle of credit growth.


Fresh data collected by JL Warren Capital show that sales of existing homes surged by 115pc from a year earlier in the second week of September, rising to 135pc for the so-called 'tier two' group of mid-to-large size cities.


It is the second week of vertiginous growth rates and suggests that buyers may be switching to hard assets after losing confidence in the Shanghai and Shenzhen stock markets. The Chinese media has reported the first signs of a buyers' panic in some cities.






Any sign of a rebound is highly significant for a world economy that has been flirting with recession for several months and is now attuned to every move in China. But it is far from clear whether this is yet another sugar-rush or a genuine turning point as the Chinese authorities struggle to handle the aftermath on an epic credit bubble.


Central banks appear to be having great trouble reading events in China, where data is mistrusted and the instruments used to regulate the economy are unfamiliar and often misunderstood.

The US Federal Reserve held fire last week on the first rate rise in nine years because of fears that China may be in deeper trouble than admitted so far. In a rare departure from central banking etiquette, Fed chief Janet Yellen hinted that the Chinese authorities no longer know what they are doing.

"I think developments that we saw in financial markets in August in part reflected concerns that there was downside risks to Chinese economic performance and perhaps concerns on the deftness with which policy-makers were addressing those concerns," she said.

Warren Capital said the sales of new homes were more modest, rising 66pc in the biggest 'tier one' cities and 22pc for the 57 cities tracked across the country. There is still a huge glut of unsold properties in the smaller cities of the interior, where rampant over-building was at its worst, but there may at last be glimmers of hope even in these areas.

The data is collected directly from the government's real estate centres around the country and offers an immediate snapshot of the market.

It follows the release of figures from the National Bureau of Statistics last week showing that house prices rose 1.7pc in August from a year earlier, and have now been recovering for several months. Prices rose 32pc in Shenzhen.

The Chinese central bank (PBOC) has cut interest rates four times since the loosening cycle began in November, when monetary policy was ferociously tight. Average mortgage rates have dropped to near 5pc from 7pc in mid-2014.

Shanghai’s housing market robust
By Cherry Cao | September 22, 2015, Tuesday | [Image: icon_PE.png] Print Edition

SENTIMENT in Shanghai’s housing market was relatively robust last week as the area of new homes sold was above the average seven-day transaction volume while home supply surged, industry data showed yesterday.

The area of new homes sold, excluding government-funded affordable housing, dipped 1.12 percent last week from the previous seven-day period to 344,400 square meters, Shanghai Homelink Real Estate Agency Co said in a report.
“Despite the insignificant retreat, last week’s volume still remained much higher than the average seven-day transaction registered so far this year,” said Lu Qilin, director of research at Shanghai Homelink.

“Notably, new home supply surged to more than 560,000 square meters last week, probably the highest weekly volume recorded in years, indicating that developers are geared up for a ‘harvest’ in October which is the traditional high season for property sales.”
New homes totaling 561,443 square meters spanning 15 projects were released to the local market last week, up 33.8 percent week on week, according to Homelink data. A high-end residential development in Huamu of the Pudong New Area launched 1,106 apartments, whose asking price was over 53,000 yuan (US$8,320) per square meter, for sale.

The average cost of the new homes rose nearly 8 percent from the previous week to 30,445 yuan per square meter.
A project in Dachang of Baoshan District sold 267 apartments for an average price of 25,917 yuan per square meter.

At $44 million Shanghai's most expensive apartment is cheap

• Share via Email

NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/s/w/u/u/image.related.afrArticleLead.620x350.gjsvno.png/1442972697962.jpg[/img]The display apartment at Shui On Land's new Shanghai development where the penthouse is priced at $44 million. Supplied
[Image: 1426118157768.png]

• Share on twitter

by Angus Grigg
 
It's set to be the most expensive apartment ever offered in Shanghai at $44 million and comes amid a mini-boom in Chinese luxury property which is defying the recent stock market turmoil and slowing economy.
The penthouse apartment in the down-town Xintiandi area, complete with roof garden and private swimming pool, is being pre-marketed at 250,000 yuan ($55,000) per square metre.
While the overall price is never advertised in China, the 800 square metre, seven-bedroom duplex will cost the eventual buyer 200 million yuan ($44 million).
[img=620x0]http://www.afr.com/content/dam/images/g/j/s/w/u/y/image.imgtype.afrArticleInline.620x0.png/1442972695574.jpg[/img]The display apartment at Shui On Land's new Shanghai development where the penthouse is priced at $44 million photo: supplied Supplied
"Wow that's up there on the aggressive side," said Michael Cole, the founder of real estate information provider, Mingtiandi when told about the price. "That is really going to test the market."
If the asking price is achieved it will be at the very top end of sales across mainland China, putting Shanghai's luxury apartment market on a similar level to Sydney, but well below London and New York.
It comes at a time when the data suggests Chinese property is recovering, while luxury sales are booming.
In the first six months of the year 230 luxury properties (over 100,000 yuan per square metre) were sold across China, according to real estate consulting firm Tospur. That is 1.6 times the number sold during all of 2014.
[img=620x0]http://www.afr.com/content/dam/images/g/j/s/w/u/x/image.imgtype.afrArticleInline.620x0.png/1442972685718.jpg[/img]The display apartment at Shui On Land's new Shanghai development where the penthouse is priced at $44 million photo: supplied Supplied

This surge in buying has been attributed to investors pulling cash out of the volatile share market earlier in the year and putting it into high end property, which is perceived as a safer bet.
Hong Kong listed developer Shui On Land is betting this trend will continue, when it begins selling its super-luxury Shanghai project in November.
The eight tower, 301 apartment complex, is the latest phase of its Lakeville development which has consistently set price records across Shanghai.
The cheapest apartment in phase four will sell for around 50 million yuan ($11 million) or 250,000 per square metre. For this buyers will get three bedrooms and a study, across 200 square metres.

The Shui On Land development is slightly more expensive than apartments in Sydney's "Pacific Bondi Beach" which have sold for around $50,000 per square metre.
But this recent record is set to be beaten by the Wanda Group's Circular Quay development in the old Goldfields House and the apartments in Crown Group's new Sydney Casino.
These prices, while still heady, put Sydney and Shanghai well below the top prices achieved in London and New York.
In 2014, British Land Co sold apartments in Mayfair for around $100,000 per square metre, while Manhattan's One57 development, dubbed the "billionaire building", is selling for around $103,000 per square metre.

"The big thing for London and New York is the liquidity of the market," said Mr Cole.
"I don't believe Shanghai property is the compelling story it was five years ago, especially given the currency risk and difficulty of repatriating funds."
Mr Cole said in previous years the super rich from Hong Kong and Singapore have bought property on the Chinese mainland, but they are not in the market any more.
The broader Chinese property market has seen a modest bounce over the last four months, as state-owned banks loosened credit requirements for home buyers and the government eased restrictions on the purchase of second homes.
The National Bureau of Statistics said new home prices rose in 35 cities across China in August, while prices were down in 25 and unchanged in ten.
"The structural problem of oversupply may have eased slightly with better sales and lower housing starts, but it is still far from resolved and high inventory pressures persist," said Nomura in a note to clients.

http://www.bloomberg.com/news/articles/2...wn-worsens

September 30, 2015 — 5:04 PM SGT






China cut the minimum down payment requirement for first-time homebuyers, stepping up support for the property market amid an economic slowdown.
The reduction to 25 percent applies to people buying homes in cities that don’t have home-purchase restrictions, the People’s Bank of China said in a statement on its website on Wednesday. The previous down payment requirement was 30 percent.

(30-09-2015, 06:15 PM)greengiraffe Wrote: http://www.bloomberg.com/news/articles/2...wn-worsens

September 30, 2015 — 5:04 PM SGT






China cut the minimum down payment requirement for first-time homebuyers, stepping up support for the property market amid an economic slowdown.
The reduction to 25 percent applies to people buying homes in cities that don’t have home-purchase restrictions, the People’s Bank of China said in a statement on its website on Wednesday. The previous down payment requirement was 30 percent.

Yet more bubble blowing.

Recovery lifts home loans to 3-year high
By Feng Jianmin | October 17, 2015, Saturday | [Image: icon_PE.png] Print Edition

HOME mortgages grew to a three-year high in Shanghai in September as the residential market continued to recover, data from the Shanghai headquarters of the People’s Bank of China showed yesterday.

Banks in Shanghai lent 21.89 billion yuan (US$3.45 billion) of new yuan mortgages last month, more than 10 times the amount in the same month of last year and up 1 billion yuan from August, the PBOC said.

It is the highest level that mortgages have reached in three years while the amount has risen monthly in the third quarter, the statement said.
The growth in the mortgages was in line with strengthening home sales since the second quarter of this year.

Data from the Shanghai Statistics Bureau showed home sales from January to August rose 18.8 percent from a year ago, rebounding from a sharp 20 percent drop in January and February.

The mortgage rise is the latest proof of Shanghai’s real estate market’s well-being.

Home prices continue to rise in September
By Cherry Cao | October 23, 2015, Friday | Online Edition

NEW home prices in China continued to rise in September despite a slower pace, according to latest official data.

Prices climbed in 39 cities, four more than in August, said the National Bureau of Statistics, which monitors housing prices in 70 cities. Ten saw prices unchanged, while prices fell in the other 21.

Again, Shenzhen in southern China's Guangdong Province led the gainers with a month-over-month increase of 4 percent, decelerating form August's 5.2 percent growth. It was followed by rises of 1.9 percent in Shanghai, 1.4 percent in Guangzhou and 1.1 percent in Beijing. The three cities registered monthly growth of 1.6 percent, 0.9 percent and 1.3 percent, respectively, in August.

"Across the country, prices of new and existing homes both recorded a slower growth in September from a month earlier, down by 0.1 and 0.2 percentage points on average from August, respectively," said Liu Jianwei, a senior bureau statistician. "City by city, first-tier ones continued to gain at a slower pace, while most of the second-tier cities saw only moderate or no growth while a limited number of third-tier ones finally started to register gains compared to earlier losses."

On a year-on-year basis, prices of new and previously-owned houses advanced at a faster pace last month -- up 1.9 percentage points and 1.7 percentage points, respectively, from August -- with the number of cities seeing price growth continuing to head north, the bureau's data showed.

Nationwide, 12 cities recorded year-over-year growth in new home prices, an increase of three from August. Notably, Shenzhen led with an annual surge of 38.3 percent, followed by increases of 9.7 percent in Shanghai, 5.9 percent in Beijing and 4.9 percent in Guangzhou.

In the existing home market, meanwhile, 15 cities saw price growth from a year earlier, an increase of eight from August.

A report released earlier this week by the bureau also suggest continuously robust momentum in the market.

New home sales in the first three quarters of this year jumped 18.2 percent year on year to 4.79 trillion yuan (US$753 billion), though decelerating from a 18.7 percent growth in the year through August.

By volume, they climbed 8.2 percent year on year to 732 million square meters during the nine-month period, slightly up from an 8 percent gain in the first eight months.
Business

• Oct 27 2015 at 2:40 PM 
  

China's bid to lift property investment challenged amid glut

• Share via Email

NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/k/j/j/6/5/image.related.afrArticleLead.620x350.gkjddw.png/1445917248816.jpg[/img]Reviving investment in real estate is crucial for the Chinese government. China Photos
by Bloomberg News
China's moves to ease mortgage restrictions and cut interest rates are bearing fruit in the nation's smaller cities, where home prices have staged a recovery. Now comes the bigger challenge, of clearing a supply glut to spur investment by developers.
Lower borrowing costs are helping a residential market recovery spread from the economic hubs such as Shanghai and Shenzhen to smaller and less-prosperous cities. New-home prices rose in September from August in more than half of the 70 large cities monitored by the government. It was the first such rise in 17 months. Yet a construction boom over the past two years has led to 424.7 million square metres of unsold homes languishing nationwide at aSeptember 30.
Reviving investment in real estate is crucial for the government, which on Friday stepped up monetary easing with its sixth interest rate cut in a year and scrapped a ceiling on deposit rates as part of efforts by Premier Li Keqiang to find new engines of growth. In September China cut the deposit first-time home buyers in smaller cities need to put down and was targeting oversupply-plagued cities that accounted for about 85 per cent of sales nationwide, China International Capital Corp said.
INVESTMENT SLOWDOWN

"The biggest factor damping the momentum in economic growth now is the slowdown in investment," with property being the main hindrance, said Liu Xuezhi, a macroeconomic analyst at Bank of Communications Co in Shanghai. "Although home prices have rebounded in first-tier cities, sales and investment in some second- and third-tier cities are still under pressure." The real estate industry contributed almost 30 per cent of gross domestic product, Nomura Holdings Inc said.
Authorities are seeking to bolster an economy that is forecast to grow at the slowest annual rate in 25 years, as drivers of growth such as construction and manufacturing have stumbled. China cut the one-year lending rate to 4.35 per cent from 4.6 per cent effective on Saturday, while the one-year deposit rate will fall to 1.5 per cent from 1.75 per cent. The People's Bank of China also scrapped a deposit-rate ceiling that limited the rate banks could pay savers.
With the deposit rate having dropped below inflation at 1.6 per cent in September, property sales might beat expectations in the fourth quarter as negative interest rates had historically preceded annual sales growth of 20 per cent to 40 per cent, CICC said. The loosening in property policy was unlikely to be reversed before the economy stabilised, the bank said in a report on October 25.
On September 30 China cut the mortgage down-payment requirement for first-time buyers in lower-tiered cities by 5 percentage points to 25 per cent. The move followed a host of other easing measures. In 2015, the government also cut the down payment for first-time home buyers borrowing from local housing providence funds to 20 per cent, allowed developers to finance a bigger part of projects with borrowed money rather than their own capital, and eased restrictions on property purchases by foreigners. In March, it lowered the deposit for some second homes to 40 per cent from 60 per cent and exempted select home owners from a home sales tax.


Policies would probably need to be loosened further to help ease a widespread supply glut before developers had the incentives to boost spending on land and new construction, Mizuho Securities Asia Ltd analyst Alan Jin said. The construction boom since 2013 has led to a 13 per cent increase in unsold homes in the year ended September 30.
China's urban dwellers already own about 24 square metres of housing per capita, and the stockpile of new homes being built suggests that another seven square metres could be added, bringing the average home ownership to 31 square metres, Nomura's chief China economist Zhao Yang said. That was "very high" given China's current level of economic development, and compared with 35 square metres per capita in Japan and 54 in the US, he said.??
'PRAGMATIC TARGET'
"What the government can do is try to prevent too sharp a decline in property investment," Mr Zhao said. "That's the pragmatic target." Stimulating the property market to revive economic growth "frankly speaking, won't be a big help", he said.

For property to be able to underpin economic growth, the Chinese government would have to further cut rates and reduce transaction taxes, because the effects of previous loosening measures were abating, Ning Jingbian, a Beijing-based analyst at CICC, said before Friday's announcement of the rate cut.
China's economy expanded 6.9 per cent in the third quarter of 2015, the slowest quarterly expansion since 2009, the government said last week. The growth in fixed-asset investment slid to 10.3 per cent in the first nine months, the lowest since 2000.
Still, a 15 per cent year-on-year increase in new property starts in September prompted some optimism about the investment outlook. The expansion, which reversed 10 months of declines, "suggests that some developers are turning positive on the sales outlook" for the next 12 to 18 months, Barclays Plc analysts led by Hong Kong-based Alvin Wong wrote in an October 19 report.
PROMISING SIGNS

China's aggressive easing measures are yielding other promising signs. Property agent Yue Lu noted an unexpected surge in potential buyers at two projects she was selling in the south-western Chinese city of Chongqing during the National Day holiday early in October, after the latest cuts to mortgage down payments.
"We were expecting few visitors, thinking people would be travelling," Yue, a manager with Shenzhen World Union Properties Consultancy Inc, said. Almost 300 visitors came in the first two days of the week-long holiday, when Chinese travel en masse, triple what Ms Yue gets during a normal weekend. "People were excited as they can now buy a home."
Bloomberg
With assistance from Emma Dong in Shanghai
 
 
 
 

Bloomberg

• Nov 30 2015 at 9:58 AM 
  

Shenzhen property boom outstrips Hong Kong

• Share via Email

[img=620x0]http://www.afr.com/content/dam/images/g/l/b/4/9/d/image.related.afrArticleLead.620x350.glb3yt.png/1448837925104.jpg[/img]Shenzhen is growing rapidly because its internet and technology companies are expanding and attracting many ambitious graduates. Bloomberg
by Ben Bland
 
Although Shenzhen was long the poor cousin of neighbouring Hong Kong, the property markets in the two cities are diverging as Hong Kong's highly inflated real estate prices start to fall while Shenzhen surges ahead on the back of a technology boom.
Housing prices in Shenzhen have jumped by more than 30 per cent in the year to date, making it the fastest-growing major property market in China, while asking prices for Hong Kong luxury flats have dropped by up to 5 per cent in the past three months.
The two housing markets' deviating paths highlight the wider trends shaping the Chinese economy.

Despite the broad slowdown in China, Shenzhen is growing rapidly because its internet and technology companies are expanding and attracting many ambitious graduates. The city's Nanshan district, the heart of its emerging technology industry, generates the highest gross domestic product per person of any Chinese region at $US48,000 per year, more than Hong Kong and not far behind Singapore.
Meanwhile, Hong Kong's more mature economy is feeling the effects of lower growth in the mainland, while its luxury goods and retail industries have been hit by President Xi Jinping's corruption crackdown.
Li Liangman, a 29-year-old who works for a construction company, moved from Beijing to Shenzhen three months ago to take advantage of the career prospects and much cleaner air.
"Life is good but the housing prices have really been shooting up," she said while shopping at the city's glitzy Mixc mall. "I'm not sure if I will be able to buy somewhere here."


At the upscale Colourful Garden development in Shenzhen's Luohu district, where some apartments boast views of Hong Kong, 70 per cent of the 550 units were sold in the first week of sales last month, with a typical 53 square metre, two-bedroom flat going for more than $US400,000. 
"Many young families are moving here, so demand is really good," said a salesman for the developer.
While property prices in many lesser Chinese cities have slumped in recent years because of a credit binge and overambitious construction, the tier-one cities of Beijing, Guangzhou, Shanghai and Shenzhen have fared much better.
Shenzhen leads the pack thanks to its more welcoming policy to migrants from elsewhere in China and the fact it is home to established technology companies such as Huawei, ZTE and Tencent, as well as a growing number of successful start-ups including drone maker DJI.

Jeffrey Gao, a property analyst at Nomura in Hong Kong, says that while second-tier cities on average have one year of housing inventory, the tier-one average is nine months and Shenzhen has just over six months. 
"We're seeing a lot of Hong Kong people buying in Shenzhen because, although prices are rising quickly, they are still maybe half or 40 per cent of what you need to pay in Hong Kong," he said. 
Hong Kong benefited from the rapid growth of the Chinese economy and relatively low interest rates over the past decade, says Paul Louie, a property analyst at Barclays.
But that virtuous circle is turning into a potentially vicious one as China slows and borrowing costs look set to rise - Hong Kong's currency is pegged to the US dollar and the Federal Reserve is expected to begin a tightening cycle soon. 

Asif Ghafoor, chief executive of ­Spacious, a property website based in Hong Kong, says that asking prices for apartments in Hong Kong's more prestigious districts have dropped as much as 5 per cent in the past three months, while rents have dropped by as much as 11 per cent in some luxury developments.
While affordability is an issue for residents of both Hong Kong and Shenzhen, Mr Louie says one key differentiating factor is that buyers in Shenzhen are betting on strong wage growth in the years ahead, while Hongkongers fear their salaries will stagnate as the economy struggles.

Financial Times