Local commentators debate the meaning of the surge in land sales.
Chinese real estate developers are increasing their involvement in overseas markets.
Home sales remain weak but the pace of decline has moderated, while April data from the National Bureau of Statistics (NBS) suggests that developers are ramping up construction activity in expectation of improved demand going forward.
Home sales remain weak at the start of May, while listed developers’ April results confirm the fall in transactions last month. Our proprietary survey of real estate developers suggests that slower growth is due to weaker demand from first-time buyers (Real Estate Macro Indicator, April 30). Underlying demand in this segment of the market remains strong and we believe that these fundamentals will reassert themselves once concerns over tightening measures die down.
Home sales slowed in April, led by a sharp fall in first-tier cities. Continued home price growth in these areas, however, raises the risk of further tightening measures being introduced.
Our survey of 300 real estate developers in 40 cities shows a significant slowdown in the pace of growth of both home sales and prices in April. However, developers are bullish about the outlook for May, while growth in the supply of new homes in April remained strong.
Home sales in first-tier cities have fallen sharply so far this month, down 37% MoM, while overall transaction volumes in the 42 Chinese cities monitored by China Confidential have also softened.
Guangzhou is set to withhold pre-selling licenses from developments with unacceptably high prices, the official Xinhua news agency reported on Monday. We think the move highlights how local governments, particularly in first-tier cities, remain under pressure to restrain property markets.
In the face of another round of credit tightening, financial pressures are likely to mount for smaller developers
The introduction of further real estate tightening measures has had only a minor impact on home sales in the 42 Chinese cities monitored by China Confidential, although transactions in first-tier cities have recorded a more noticeable slowdown.
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