The Chinese government’s curbs on the housing market will remain “tight” this year, preventing transactions and prices from rebounding significantly, according to Shui On Land Ltd., the developer controlled by Hong Kong billionaire Vincent Lo.
“The volume of transactions has increased and sentiment is improving, but any substantial turnaround is unlikely,” said Freddy Lee, chief executive officer of Shanghai-based Shui On, in an interview in Singapore yesterday. “I feel that prices will maintain where they are for a while.”
China has pledged to maintain its curbs on the housing market even as economic growth is slowing, prompting the central bank to cut borrowing costs for the first time since 2008 on June 7. The Housing Ministry said this month that China will steadfastly continue with its property curbs that have so far included higher down payment requirements and restrictions on the number of homes being bought.
China’s home values fell in a record 54 of 70 cities tracked by the government in May as developers cut prices.
Shui On, which developed the Xintiandi entertainment complex from century-old homes in Shanghai, is accelerating development in Chinese cities including Chongqing, Wuhan and Foshan. The developer last month said it plans to sell shares in the complex unit to investors in a separate listing in Hong Kong.
The company has begun seeking tenants for its shopping mall in Chongqing and the level of rents has “been better than what we’ve expected,” said Lee, without elaborating.
Shui On’s first Xintiandi project is a residential and commercial complex in Shanghai built through the redevelopment of houses dating back to the 19th and 20th centuries. The complex, whose name means New Heaven and Earth in Chinese, attracted local and international chains including Paulaner Brahaus and Starbucks Corp.