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Beijing seen to ease property market control |
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HOME >> NEWS >> Beijing seen to ease property market control |
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 The head of Soho China, one of the mainland’s biggest commercial property developers, said on Thursday that she expected Beijing to announce further measures to loosen its tight control of the property market to avoid a slump.
“The property market is very important to China. It accounts for 10 per cent of GDP and affects many other industries such as banks,” said Zhang Xin, chief executive. “I don’t think the government will want to see a hard landing.”
China’s property market has seen a significant slowdown this year after the government put in a series of regulations, such as a restriction on mortgage lending, to take the steam out of the sector.
The volume of property transaction fell 36 per cent in Beijing in August, according to Soho China, and dropped by an even bigger degree in Shanghai. Home prices in 70 major Chinese cities rose 5.3 per cent in August – the slowest since February 2007 – down from 7 per cent in July.
In a move to boost the domestic economy and the property sector, China’s central bank this week cut the country’s benchmark interest rate for the first time in six years.
Ms Zhang said on Thursday that she expected China’s regulators to reveal more policies to rebuild confidence in the property market amid increasing signs of disastisfaction from real estate investors.
In August Vanke, China’s biggest property developer, slashed prices by up to 25 per cent for some projects. The move angered those buyers who had already paid for their yet-to-be-completed apartments on similar properties, after Vanke refused demands for refunds. The move prompted a group of customers to demonstrate in Vanke’s Hangzhou office, destroying furniture and overturning desks.
“The anger has turned into a social unrest. The government does not want to see that,” said Ms Zhang.
Ms Zhang said the significance of real estate investment in China would encourage the government to draw up further measures to support demand and help the industry to escape a “severe winter”. She expected those measures to be related to mortgages and lendings.
“The market is very tightened now. We think the government will loosen control. We hope and urge the government to do it,” said Ms Zhang.
Soho China on Thursday reported a net loss of Rmb145.8m ($21.3m) for the first half of this year, compared with a net profit of Rmb63m in the same period of 2007, mainly due to a lack of new completed projects. The company said its results would improve in the second half when the bulk of this year’s turnover is booked.
Shares of Soho China fell 4.6 per cent to HK$2.7 in Hong Kong on Thursday, after plunging 66 per cent since the start of the year. |
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