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Tuesday, 15 December 2009
China Developers Fall as Government Targets Housing
China Vanke Co. led declines by the nation’s developers after the official Xinhua News Agency said the government will target “excessive” growth in property prices in some cities.
China Developers Fall as Government Targets Housing
By Bloomberg News 15 December 2009
China Vanke Co. led declines by the nation’s developers after the official Xinhua News Agency said the government will target “excessive” growth in property prices in some cities.
Vanke, the nation’s biggest developer by market value, dropped 2.5 percent to 11.50 yuan at the 11:30 a.m. break in Shenzhen. Poly Real Estate Group Co., the second biggest, slumped 2.9 percent to 23.86 yuan in Shanghai, falling for a sixth day. China Overseas Land & Investment Ltd. dropped 4.5 percent to HK$17.52 in Hong Kong.
The government plans to strengthen supervision of the real estate market and “speed the construction of low-cost housing,” Xinhua reported yesterday, citing a meeting of the State Council. China said last week it will re-impose a sales tax on homes sold within five years after property prices climbed in November at the fastest pace since July 2008.
“It’s a harbinger of further tightening measures,’ Tu Lilei, a Shanghai-based analyst at Qilu Securities Co., said in a phone interview. “The government may increase the down payment required for second-home purchases to cool speculative demand.”
The Oriental Morning Post reported today the government may impose property taxes on large and luxury homes, citing a researcher at E-house China R&D Institute. The China Securities Regulatory Commission has asked eight property developers, including Vanke, to provide information on their capital flows, according to a separate report in the newspaper.
Growth Concerns
An index tracking 33 property companies listed in Shanghai slumped 2 percent today, the biggest decline among the six industry groups. The Hang Seng Property Index slipped 1.5 percent, paring this year’s gain to 68 percent.
China is not likely to take “heavy-handed policy measures” next year as “any sharp correction in the property market may hamper overall economic growth,” Fitch Ratings wrote in a report today.
The policies announced yesterday to reduce property-price increases should aid economic growth because the government will boost the supply of homes rather than limit investment, Bank of America-Merrill Lynch economists Lu Ting and T.J. Bond said in an e-mailed note today.
Andrew Mattock, who manages the $342 million Henderson Horizon China Fund, said this week he will stay “fairly aggressive” on property stocks because tightening risks are priced in.
Asset Bubbles
Dreyfus Greater China Fund manager Hugh Simon said Dec. 11 he won’t be adding to his real estate holdings after the Shanghai property index jumped 121 percent this year.
Asset bubbles are the No. 1 threat to financial stability in Asia, posing a bigger danger than inflation, Norman Chan, the head of Hong Kong’s de facto central bank said yesterday.
Hong Kong-based Shimao Property Holdings Ltd., which develops real-estate projects in China, fell 5.5 percent to HK$15.68, set for its biggest decline since Oct. 27. Greentown China Holdings Ltd., which builds residential villas and low- rise apartments, dropped 6.6 percent to HK$13.80 after more than quadrupling this year.
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China Developers Fall as Government Targets Housing
By Bloomberg News
15 December 2009
China Vanke Co. led declines by the nation’s developers after the official Xinhua News Agency said the government will target “excessive” growth in property prices in some cities.
Vanke, the nation’s biggest developer by market value, dropped 2.5 percent to 11.50 yuan at the 11:30 a.m. break in Shenzhen. Poly Real Estate Group Co., the second biggest, slumped 2.9 percent to 23.86 yuan in Shanghai, falling for a sixth day. China Overseas Land & Investment Ltd. dropped 4.5 percent to HK$17.52 in Hong Kong.
The government plans to strengthen supervision of the real estate market and “speed the construction of low-cost housing,” Xinhua reported yesterday, citing a meeting of the State Council. China said last week it will re-impose a sales tax on homes sold within five years after property prices climbed in November at the fastest pace since July 2008.
“It’s a harbinger of further tightening measures,’ Tu Lilei, a Shanghai-based analyst at Qilu Securities Co., said in a phone interview. “The government may increase the down payment required for second-home purchases to cool speculative demand.”
The Oriental Morning Post reported today the government may impose property taxes on large and luxury homes, citing a researcher at E-house China R&D Institute. The China Securities Regulatory Commission has asked eight property developers, including Vanke, to provide information on their capital flows, according to a separate report in the newspaper.
Growth Concerns
An index tracking 33 property companies listed in Shanghai slumped 2 percent today, the biggest decline among the six industry groups. The Hang Seng Property Index slipped 1.5 percent, paring this year’s gain to 68 percent.
China is not likely to take “heavy-handed policy measures” next year as “any sharp correction in the property market may hamper overall economic growth,” Fitch Ratings wrote in a report today.
The policies announced yesterday to reduce property-price increases should aid economic growth because the government will boost the supply of homes rather than limit investment, Bank of America-Merrill Lynch economists Lu Ting and T.J. Bond said in an e-mailed note today.
Andrew Mattock, who manages the $342 million Henderson Horizon China Fund, said this week he will stay “fairly aggressive” on property stocks because tightening risks are priced in.
Asset Bubbles
Dreyfus Greater China Fund manager Hugh Simon said Dec. 11 he won’t be adding to his real estate holdings after the Shanghai property index jumped 121 percent this year.
Asset bubbles are the No. 1 threat to financial stability in Asia, posing a bigger danger than inflation, Norman Chan, the head of Hong Kong’s de facto central bank said yesterday.
Hong Kong-based Shimao Property Holdings Ltd., which develops real-estate projects in China, fell 5.5 percent to HK$15.68, set for its biggest decline since Oct. 27. Greentown China Holdings Ltd., which builds residential villas and low- rise apartments, dropped 6.6 percent to HK$13.80 after more than quadrupling this year.
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