The looming National Day holiday in October may be crucial for China’s real estate market. In an attempt to kick-start stagnating real estate sales, major cities will be holding real estate expos during the holiday, and buyers will be watching for future price signals.
This fall’s Shanghai Real Estate Trade Fair is widely expected to be the beginning of a new round of price cuts. In China, so-called “golden September and silver October” are a traditionally good season for the sales of all kinds of commodities. But in September this year, Shanghai’s real estate sales volume has continued to drop. In July, trading of newly built housing slumped by 69% over the same month last year, and the average price fell by 24% over the previous month, a record monthly decrease.
Major financial firms have begun to sell their Shanghai properties. Morgan Stanley plans to sell three property projects there and will discontinue its investment in Shanghai World Financial Center. Citigroup intends to sell its two apartment buildings in Shanghai, while Merrill Lynch is selling its project on West Nanjing Road.
Tuesday, September 30, 2008
Saturday, September 20, 2008
Credit Risks of China's Real Estate Sector
Xinhua Finance Limited ("XFL", TSE Mothers: 9399 and OTC: XHFNY), China's premier financial information provider, releases today its report on "Credit Risks of China's Real Estate Sector" that identifies policy risk as the primary risk factor affecting the credit worthiness of the real estate industry. Xinhua Finance discusses in the report the status of China's real estate developers, and examines both business and financial issues challenging the industry. Xinhua Finance analyzes such issues from a perspective unique in the market and finds that dynamic government policy changes constitute the primary risk for the industry.
The report explains that China's real estate sector has benefited from the nation's strong economic growth and favorable government policy since the beginning of economic reforms. As a result the industry has for a long period of time enjoyed a remarkable expansion. But with the slowing of the economy and the tightening of credit, Xinhua Finance believes that the recent liquidity problems of the industry are the beginning of a process of unfolding credit risks associated with the nature of the industry that have accumulated over time.
The report explains that China's real estate sector has benefited from the nation's strong economic growth and favorable government policy since the beginning of economic reforms. As a result the industry has for a long period of time enjoyed a remarkable expansion. But with the slowing of the economy and the tightening of credit, Xinhua Finance believes that the recent liquidity problems of the industry are the beginning of a process of unfolding credit risks associated with the nature of the industry that have accumulated over time.
Wednesday, September 10, 2008
Xinhua Finance Releases Report on 'Credit Risks of China's Real Estate Sector'
The report explains that China's real estate sector has benefited from the nation's strong economic growth and favorable government policy since the beginning of economic reforms. As a result the industry has for a long period of time enjoyed a remarkable expansion. But with the slowing of the economy and the tightening of credit, Xinhua Finance believes that the recent liquidity problems of the industry are the beginning of a process of unfolding credit risks associated with the nature of the industry that have accumulated over time. Xinhua Finance indicates that the adjustment by China's real estate industry to the on-going depressed environment is likely to extend over a significant period of time and suggests that investors exercise caution in considering the credit risk implications for debt securities issued by the real estate industry.
The report further points out that the risks confronting the industry arose from an imbalance amongst factors such as markets, development and management expertise, technology, and financing. The continuous growth of the real estate markets without undergoing significant adjustments has led to the accumulation of risks, an accumulation which is now beginning to release. Such imbalances are almost inevitable when the market starts from a very low base and expands at such a rapid pace. Compounding the risk is the fact that China has yet to fully transform into a market economy. China's real estate sector has been a captive of struggles between policy-guided and market-based development models since the industry started up. In light of the significant role played by the industry in China's overall economy, governmental change in any policy or level of macro-economic adjustment will impact the real estate sector to some degree.
The report further points out that the risks confronting the industry arose from an imbalance amongst factors such as markets, development and management expertise, technology, and financing. The continuous growth of the real estate markets without undergoing significant adjustments has led to the accumulation of risks, an accumulation which is now beginning to release. Such imbalances are almost inevitable when the market starts from a very low base and expands at such a rapid pace. Compounding the risk is the fact that China has yet to fully transform into a market economy. China's real estate sector has been a captive of struggles between policy-guided and market-based development models since the industry started up. In light of the significant role played by the industry in China's overall economy, governmental change in any policy or level of macro-economic adjustment will impact the real estate sector to some degree.
Tuesday, September 2, 2008
Kuwait Finance invests in China real estate project
DUBAI: Kuwait Finance House, the Gulf state's biggest bank by market value, said on Saturday it was investing $275 million in a real estate project in China as part of plans to boost its exposure to Asia.
KFH has signed a deal with China's Nan Hai Corp to invest in the $3 billion Peninsula real estate development through its Asian Fund 2, the Islamic bank said in a statement.
"This comes as a step from KFH to cement its investments in this vital spot of the world," the lender said.
KFH has signed a deal with China's Nan Hai Corp to invest in the $3 billion Peninsula real estate development through its Asian Fund 2, the Islamic bank said in a statement.
"This comes as a step from KFH to cement its investments in this vital spot of the world," the lender said.
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