The prices of the property market in China increased in the previous month. The property market is a huge contributor to the growth of China’s economy. The strategy introduced to reduce the demand were not effective in controlling the increase.
In China, prices of home in the main cities went up by 0.6% in comparison to February,2017. According to the National Bureau of Statistics, the prices in 15 cities were stable. But the prices for latest homes in 3rd-tier cities increased by 0.4%.
Most of the Economists are of the view that tight actions can be expected as prices increases. But with the increase in sales and prices in the 1st-tier cities. It is possible that future limitations will be more directed.
According to Mr. Zhou Hao, a Singapore Economist, the focus will move from top-tier cities towards small and medium-sized cities. The reason is that the sales in top-tier cities have decreased.
The prices of new homes in 70 cities have increased 11.3% in contrast to last year. The increase has slowed down since February, the price gain was 11.8%. As far as Beijing is concerned the prices increased after many months on monthly basis. It approximately increased up to 19% more than the previous year. However, there was a decrease in the prices in Shenzhen and Shanghai. The decrease in the price was not as significant as last month’s.
The recent effort to reduce prices of real estate has completely failed to block the investors. This has resulted in making China the World’s latest property stocks. According to the Bloomberg World Real Estate Index, 9 Chinese companies are ranked as the best performers.
Moreover, China Evergrande Group, Sunac China Holdings Ltd, and Country Garden Holdings are the top winners. They have gained more than 70%. Therefore the rising sales and profits resulted in the share being overbought. Furthermore, it has compelled the small sellers to back off. Raymond Cheng said that the revenue of these 3 companies is average. Although some of the investors choose increasing sales over profits. The increase in sales in the last year might lead to some profit this year or in the coming year.
The sales for Evergrande has increased to 82% and for Country Garden, it was 120%. This makes them China’s top and 3rd largest. Sunac’s sales were more than the double to nearly 150 billion Yuan.
Though Credit Suisse Group advise that it the perfect time to take profit. It was recommended by BNP Paribas that all the three stocks should be bought. Profit can be made but slowly. According to analyst, Wee Liat Lee, investors will be carefully selecting the stocks. Big developers are likely to take the market share from the small companies. He also said, this year to struggle through the limitations, a big developer must be diversified.
It is believed that the prices will increase. The restriction is putting down the market but it expected the prices will double in the coming year.
Refer to links below for more information
https://www.bloomberg.com/news/articles/2017-04-17/china-has-world-s-hottest-property-stocks-as-curbs-overlooked
http://www.straitstimes.com/business/property/chinas-march-home-prices-defy-cooling-measures
Like China, Singapore’s real estate market has shown strong signs of recovery. Healthy sales have been seen across both new launch and TOP Singapore Condo for the past few months. Few good examples are:
Upcoming new launch condos
- Shunfu Condo | Marymount Condo
- Martin Modern
- Margaret Drive Condo
- Hundred Palms Residences EC (Executive Condo)
