China: Analysts optimistic on real estate
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Date: Sun, 6 Dec 2009 |
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With home sale volumes and home prices reaching record highs in recent months, real estate industry analysts gathered over the weekend at the China International Real Estate & Archi-tech Fairs (CIHAF) to discuss development trends in the next year.
The home sale volume in major cities, including Beijing, Shanghai, Shenzhen and Guangzhou, respectively increased 105.9 percent, 58.77 percent, 75.2 percent and 83.49 percent in the first 11 months of 2009 compared with last year, according to the China Real Estate Model Index Report which was released over the weekend by the China Index Academy, a real estate research institute.
Housing prices in Beijing reached 17,000 yuan ($2,490.45) per square meter in August, an increase of 13.4 percent over the record high of 14,900 yuan ($2,182.81) per square meter set in 2008.
And housing prices in other top tier cities, including Hangzhou and Tianjin, also reached record highs in the last two months, according to the report.
Analysts from different parties including real estate developers and financial institutions all made predictions on the real estate market's development in 2010 over the weekend, with most basing their predictions on the country's macroeconomic policies.
"What we are concerned with most is whether the macro control policies will be changed at China's Central Economic Work Conference, and from that we will see whether preferential policies toward the real estate market will expire,"Huang Jinxia, sales manager at Sinohydro Real Estate, said at the 6th Digital Real Estate Forum held by the China Index Academy over the weekend.
China's Central Economic Work Conference opened Saturday, though no further detailed policies toward the real estate market had been disclosed as of since Sunday.
The government released policies to encourage sales growth at the end of last year. Home sales were given a boost through tax exemptions and interest discounts for loans.
Developers also could delay payment for land sales for up to six months.
"The government will not intervene too much into the commercial real estate (sec-tor) in 2010, because it needs to keep the real estate market booming to ensure the country's economy runs well,"Teng Tai, director of the research institute of China Galaxy Securities Company, said at the CIHAF over the weekend.
"And the investment on the low-rent homes and price-limited homes for lower income residents will be strengthened."
Northeast Securities predicted that in the first half of 2010, the real estate industry will see positive growth, with asset prices soaring, although the market will remain uncertain.
Some real estate developers are optimistic on the outlook of the industry at least in the first half of next year.
"According to our investigation, home buyers will still be enthusiastic in buying homes in the short term because of the country's relatively easy monetary policy,"Zhang Hao, sales manager of the Beijing Runze Zhuangyuan Real Estate Company said at the forum.
Zhang added that in the long term the real estate market will still see an upward trend, though it will not develop as fast.
"Most of the real estate companies, including China Resource Land Limited, will keep on developing new homes faster, so consequently, the supply will increase in the first half of next year,"Ma Yun, the director of the Hongshan Shijia Project of China Resource Land said at the forum. "But we will be cautiously optimistic in the second half of next year."
But analysts from the financial industry warned real estate developers to pay attention to liquidity.
"Some real estate tycoons including Vanke and Gemdale will (find financing) much easier than small ones, because the China Banking Regulatory Commission's policies will be looser for developers with much greater developing strength,"Ye Tianfang, director of the real estate and financial department of the China Minsheng Banking Group, said at the CIHAF.
"The monetary policies will possibly change and be full of uncertainty, although the macro economy will go on well next year."Said Ye.
Ye added that developers need to prepare to ensure their own capital liquidity.
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