Feb. 10 (Bloomberg) -- China Vanke Co., the country’s biggest developer, said it expects a “sharp” drop in sales this month after revenue in January more than tripled to a record 20.1 billion yuan ($3 billion).
Revenue rose 221 percent last month from a year earlier, making Vanke the nation’s first residential property developer with monthly sales in excess of 20 billion yuan, the Shenzhen-based company said in an e-mailed statement late yesterday. It sold 1.65 million square meters (17.8 million square feet) of properties in January.
Vanke’s sales came before the government extended property curbs to ensure housing remains affordable amid soaring home prices. China last month raised the minimum down payment for second-home purchases, told local governments to set price targets on new properties and introduced taxes for residential properties in Shanghai and Chongqing. The central bank raised interest rates this week for the third time since mid-October.
“Vanke has a good sales ability, while many buyers dashed into the market ahead of the property measures,” Du Jinsong, a Hong Kong-based property analyst at Credit Suisse Group AG, said by phone today. “Sales will fall this month because homebuyers held a wait-and-see position after the government policies.”
Vanke’s shares rose 2 percent to 8.18 yuan at the 3 p.m. close on the Shenzhen stock exchange, trimming the loss in the past year to 11 percent. The measure tracking property stocks on the Shanghai Composite Index, which doesn’t include Vanke, gained 1.6 percent today.
Lunar New Year
Many of Vanke’s December sales were booked in January, boosting the figure, while February, which had the Lunar New Year holiday, usually is a low season for property sales, said Tan Huajie, the company’s board secretary, in the statement. Chinese markets were closed for the holiday from Feb. 2 to 8.
“We proactively did promotions during the holidays, but February’s sales are still likely to drop sharply from January,” Tan said.
About 88 percent of Vanke’s apartments sold in January were less than 144 square meters, according to the statement. Vanke added 12 new projects in nine cities last month and entered the smaller central city of Wuhu and the northern city of Qinhuangdao.
Vanke’s strategy of moving into smaller Chinese cities may drive their growth further this year, said Credit Suisse’s Du.
The company will pay close attention to the market’s reaction to the government curbs, Tan said in the statement.
China’s property prices rose 6.4 percent in December from a year earlier, increasing for a 19th month, the country’s statistics bureau said Jan. 17.
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