Sales on the slide
Some of China’s largest real estate developers announced decreased property sales in August. Vanke, China’s biggest developer, reported a 35% drop over the previous year. Shenzhen-based Gemdale said sales fell 19% for the month. Agile Properties also said announced its first-half sales had fallen 28% from the same period a year ago.
Investment rules eased
A September circular issued by the central government granted provinces more responsibility in approving foreign-investment real estate projects. Such projects are still required to file with the national-level Ministry of Commerce, however. Allowing provincial-level authorities to review and approve applications is expected to speed up the process.
CASS calls for reform
A report issued by the Chinese Academy of Social Science (CASS) in September suggested the government rethink its real estate development strategy to avoid a US-like subprime mortgage crisis. The report suggested that the government reform the housing fund management system and establish housing mortgage banks and companies dealing in securities to back housing mortgages.
Poly takes 3 new stakes
Poly Real Estate Group, the country’s second-largest developer by market value, announced plans in September to acquire shares in three companies. Poly will purchase 50%, 40% and 60% stakes in three Guangdong-based companies. The net assets of the three companies were over US$10 million in 2007.
Morgan Stanley sells out
Morgan Stanley, one of the biggest foreign investors in China’s real estate sector, is looking to sell two high-profile blocks of Shanghai luxury residences, prompting speculation that the market has reached its peak. It also recently rejected an offer to buy a third Shanghai tower. Two other foreign property investors also have Shanghai serviced apartment buildings on the market.
Shimao cuts sales targets
Developer Shimao Property Holdings said its first-half net profit fell 56% from a year earlier on lower property sales. Chairman Hui Wing-mau said the company had cut is contracted property sales target for the year by 20%, as he expects the market to remain down.