Wednesday, 13 June 2012

China property sales rise in key markets

SHANGHAI (Reuters) - The number of property purchases in some major Chinese cities has picked up, as regulators struggle to combat rumours that Beijing is preparing to loosen curbs on real estate investment to combat slowing economic growth.

Property sales in cities including Hangzhou, Shenzhen and Nanjing have sped up in recent months, the official Shanghai Securities News reported.

Chinese regulators continue to deny suggestions that a policy loosening is imminent, with the government concerned that any such move would reinflate the property bubble it has spent two years trying to deflate.

The National Development and Reform Commission on Tuesday said that media reports quoting an unnamed NDRC official as saying loosening property policies was a "second card to save the market" were fabricated.

But media reports that the People's Bank of China had issued new guidelines permitting commercial banks to offer up to 30 percent discounts on loans to first-time home buyers drove up real estate stocks on Tuesday.

With property prices yet to show signs of recovery, bargain hunting appears have kicked in. A survey released in early June by the China Real Estate Index System showed average home prices in 100 key Chinese cities fell in May.

Property sales volume in Hangzhou, a second-tier city near Shanghai, stood at 13,531 by June 11, already exceeding total transactions for last year, the Shanghai Securities Journal report said.

One 700 unit housing project in the eastern city of Nanjing was visited by 11,000 prospective buyers, it said.

The report quoted unnamed industry sources who said that real estate companies were contemplating changing their inventory strategies in response to the new trend, slowing the release of unsold property into the market in anticipation of future price rises.

Property developer Vanke's <000002.SZ> chief executive officer, Yu Liang, said in a television interview in early June that there were about 114 million square metres of unsold property inventory on hand in China's first-tier cities, enough to last for 11 months at the current pace of sales.

(Reporting by Pete Sweeney; Editing by Joseph Radford)


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