Developer KWG Property said it expects China’s property prices to rise more slowly in the second half of 2009 after a sharp rebound in the first half, as Beijing moves to stabilise the market.
Property prices in China were up by an average 10-15% in the first half of 2009, but the gains are likely to slow to single-digits for the remainder of the year.
Chief Financial Officer Hoffman Tsui made his forecast amid a series of calls by China’s banking regulator for responsible lending, as many banks have recently boosted their real estate loans in response to Beijing’s efforts to stimulate the economy during the global downturn.
Liu Mingkang, head of the China Banking Regulatory Commission, singled out the dangers of unhealthy growth in the property market and made one of his strongest calls yet to banks to guard against taking excessive risks.
In its own business, KWG saw its apartment sales for the first half of 2009 rise 50%, but margins fell as it shifted its mix to focus more on mainstream product.
The developer generated RMB3 billion ($439.2 million) in apartment sales this year through June, against a full-year target of 5 billion yuan.
Reuters reported KWG’s cash on hand amounted to RMB3 billion, including proceeds from its recent US$196 million share sale. It has a land bank of about 6 million square meters.