China property market expected to continue recovery on good sales in Sept

A group of real estate developers in China unveiled their sales data for September, showing good results. Of the listed property enterprises, only China Merchants Property Industry Co., Ltd. (000024.SZ) saw the housing areas sold in September fall year on year, while the remaining saw their housing areas sold in September and the first three quarters increase year on year.

The China Index Academy pointed out that due to policy stimulus, the domestic property market saw an increase in both sales volume and sales prices and the recovery is expected to continue.

--- Good sales in Sept.

The following table shows sales of some listed property developers in September and January-September.

--- Growing enthusiasm for buying lands

According to their filings to the stock exchanges, the property developers' enthusiasm for buying lands did not weaken.

Vanke has bought seven plots of lands for property development nationwide since release of its August sales data. In addition, it also added two logistics property projects in Changsha and Chengdu.

Since release of its August sales data, China Merchants Property increased six land projects of which the project in Gulou District, Nanjing and the project in Xiamen cost 3.23 billion yuan and 4.37 billion yuan, respectively.

Beijing Capital Development also said that its subsidiary in Fujian bought a land in Fuzhou city for 3.34 billion yuan.

Of the 40 cities monitored by the China Index Academy, the number of lands released for real estate development increased 24 percent month on month, from October 5 to 11, with transactions down 34 percent month on month and land-transferring fees down 17 percent month on month.

Tier-1 cities like Beijing, Shanghai amd Guangzhou continued to increase land supplies in the period, but Shenzhen was an exception. A total of 19 land projects were rolled out in the tier-1 cities in the period, up 10 from a week ago, with the areas amounting to 740,000 square meters, up 240,000 square meters from a week ago and up 47 percent month on month.

--- Recovery likely to continue

According to the China Index Academy, prices of newly-built houses in the country's 100 cities were averaged at 10,817 yuan/square meter in September, up 0.28 percent month on month and 1.36 percent year on year.

In a breakdown, 59 cities saw a month-on-month increase in house prices, while the remaining 41 cities saw a fall.

In September, the areas of houses traded in tier-1 cities surged 60 percent year on year, said the Academy.

A total of 567 residential land projects were concluded in September in 300 cities, with the planned building areas at 56.66 million square meters and land-transferring fees at 174.4 billion yuan, up 58 percent from a month earlier, according to the Academy.

Release of the recent loose monetary policies has stimulated an obvious rebound in domestic property transaction in both volume and prices. Affected by the central bank's cut in interest rates and reserve requirement ration (RRR) for banks, the authorities' lowering down payments for first home purchases, and the policy of supporting extension of mortgage loans in one city by provident funds paid in the other city, real estate enterprises will accelerate roll-out of new house projects, said the Academy.

Meanwhile, the differentiation in different cities will continue. Some cities still face huge pressure on de-stocking and house prices will lack the driving force, while the tier-1 cities and some popular tier2 cities will see house prices continue the uptrend, the Academy added.