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Property inventories rise 45%
Source: Xinhua |
August 12, 2011, Friday
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CHINA'S property developers saw inventories surge in the first half of this year as government measures to cool the market have started to bite.
Total inventories of 20 listed real estate developers that had released semi-annual reports as of Wednesday soared 46 percent year on year to 317.77 billion yuan (US$49.65 billion) in the first half of 2011, according to Wind Information, a Shanghai-based financial data provider.
China Vanke Co, the country's largest property developer by market value, had 171.37 billion yuan of unsold houses as of June 30, up 28.5 percent from three months earlier, the company's semi-annual report showed.
China Merchants Property Development saw its inventory rise 15 percent to 44.47 billion yuan.
The 18 smaller developers had inventories totaling 101.93 billion yuan at the end of June, up 42 percent from a year earlier.
Growing inventories and tightening bank lending may press developers, especially small ones, to cut prices substantially in the second half of this year to stimulate sales, analysts said.
Zhang Yue, chief analyst with Homelink, said developers will feel the pinch if the central government continues to tighten credit and restrict home purchases.
"Small and medium-sized developers are less competitive and will be hit by the first shock wave," Zhang said.
Market shrinkage has prompted more mergers and acquisitions in the sector, with 62 equity merger cases worth 17.54 billion yuan occurring in the first half, up 72.2 percent and 101.9 percent year-on-year respectively, according to Beijing-based real estate agency Centaline Property.
Rocketing property prices have been a major concern in China as many ordinary citizens can't afford an apartment.
The Chinese government has restricted residents in major cities from buying second or third homes, required higher down payments for mortgages and instituted new property taxes in the cities of Chongqing and Shanghai to rein in prices.
In June, 26 cities of 70 major cities saw new home prices decline or remain unchanged from a month earlier. Only 20 cities saw lower or unchanged prices in May.
Government measures to curb credit may speed up the decline of housing prices in the second half of the year, said Guo Yi, marketing director of Beijing-based Yahao Real Estate Selling and Consulting Solution Agency.
Total inventories of 20 listed real estate developers that had released semi-annual reports as of Wednesday soared 46 percent year on year to 317.77 billion yuan (US$49.65 billion) in the first half of 2011, according to Wind Information, a Shanghai-based financial data provider.
China Vanke Co, the country's largest property developer by market value, had 171.37 billion yuan of unsold houses as of June 30, up 28.5 percent from three months earlier, the company's semi-annual report showed.
China Merchants Property Development saw its inventory rise 15 percent to 44.47 billion yuan.
The 18 smaller developers had inventories totaling 101.93 billion yuan at the end of June, up 42 percent from a year earlier.
Growing inventories and tightening bank lending may press developers, especially small ones, to cut prices substantially in the second half of this year to stimulate sales, analysts said.
Zhang Yue, chief analyst with Homelink, said developers will feel the pinch if the central government continues to tighten credit and restrict home purchases.
"Small and medium-sized developers are less competitive and will be hit by the first shock wave," Zhang said.
Market shrinkage has prompted more mergers and acquisitions in the sector, with 62 equity merger cases worth 17.54 billion yuan occurring in the first half, up 72.2 percent and 101.9 percent year-on-year respectively, according to Beijing-based real estate agency Centaline Property.
Rocketing property prices have been a major concern in China as many ordinary citizens can't afford an apartment.
The Chinese government has restricted residents in major cities from buying second or third homes, required higher down payments for mortgages and instituted new property taxes in the cities of Chongqing and Shanghai to rein in prices.
In June, 26 cities of 70 major cities saw new home prices decline or remain unchanged from a month earlier. Only 20 cities saw lower or unchanged prices in May.
Government measures to curb credit may speed up the decline of housing prices in the second half of the year, said Guo Yi, marketing director of Beijing-based Yahao Real Estate Selling and Consulting Solution Agency.
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