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THE housing market in Beijing is showing signs of improvement from the first half of the year, but sharp gains aren’t likely even with last week’s interest rate cut, said a senior executive at the country’s largest property developer.
“The market bottomed in June and things are improving,” said Mao Daqing, senior vice president at China Vanke Co. and head of the Shenzhen-based developer’s Beijing operations. Home resales are improving and the country’s four biggest banks have indicated that they will offer more favorable mortgage terms for homebuyers, he said.
“But does this mean that the housing market will now see explosive growth or sharp gains?” Mao said. “There aren’t any factors to support that either.”
China cut interest rates late Friday for the first time in more than two years. Analysts say the move will underpin still weak sales of new homes in Beijing and elsewhere in the country. It follows an easing in mortgage rules in September, and a focus on speeding up a trial for the roll-out of real estate investment trusts (REITS).
The advent of REITS would provide a new channel for property developers to raise money, as well as another way for people to invest in the sector.
Beijing’s housing market is seen as a barometer of demand in the country’s property market because the nation’s capital attracts buyers from all over the country. In the first 10 months of the year, housing sales fell 23.3 percent from a year earlier in terms of floor area, the city’s statistics bureau said.
Beijing is home to the country’s most expensive properties, though prices have eased amid a nationwide property downturn.
Beijing is one of Vanke’s most important markets, along with other first-tier cities such as Shenzhen and Shanghai.
Inventories of unsold new homes in Beijing have moderated to 11 months’ worth of sales from a peak of 15-18 months in August. While 11 months are far from the 5-6 months seen when the city’s housing market was at its peak, it is an appropriate level, said Mao. (SD-Agencies)
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