[photopress:real_estate_1.jpg,full,alignright]It appears potential home buyers are waiting for lower housing prices in the wake of macro control measures over property sector. Property sales in the major cities including Beijing, Shanghai and Shenzhen shrank in the traditional boom season, compared to the same period of last year.
GuangZhou R&F Properties said in its 2007 annual report that its liability-asset ratio was 76.6%. A primary mission for the company to solve tightened cash flow.
The Guangzhou-based real estate developer plans to move its contracted sales to RMB24 billion this year from RMB16.1 billion last year and expects the properties completed and sold will reach 2.2 million square meters.
[photopress:real_estate_2.jpg,full,alignleft]For this proposition to work as planned buyers will have to change thie attitudes. The strategy has Beijing as its second priority market well after Guangzhou. But related data show only 5,408 sets of new houses were sold in Beijing this April, down 54% year onyear although the selling prices averaged RMB13,488 per square meter, more than RMB10,180 in the same period of last year.
GuangZhou R&F Properties has already offered various preferential measures to promote sales of residential properties in Beijing. But sales last month still slid month on month.
The situation is similar elsewhere.
Statistics from China Real Estate Index System Shanghai office show a total 14,150 sets of new houses were sold in Shanghai this April with a gross floor area of 1.47 million square meters, sliding 3,494 and 339,800 square meters down from the March figures.
House sales in Shenzhen in the first four months this year were 853,100 square meters, representing a year-on-year decrease of 62.89%.
Goldman Saches cut the outlook for mainland real estate developers to cautious from attractive. These are not just pleasant descriptive words. They are defined levels of recommendation.
The Wall Street investment bank is of the opinion that risks arising from macro environment and drops of earnings and net asset per share are increasing.
Goldman Sachs made a survey in 12 mainland cities recently, which suggested mainland housing prices need to drop 10 to 20% if demand is to be nrought back to its previous level.
Source: Trading Markets