May 5 (Bloomberg) -- Poly Real Estate Group Co. fell the most in almost three weeks, leading declines in Chinese property stocks amid growing concern the nation’s housing market is cooling.
Poly Real, China’s second-biggest listed developer, slid 3.5 percent to 7.38 yuan at the close in Shanghai, its biggest drop since April 15. Gemdale Corp. lost 2.8 percent. Shimao Property Holdings Ltd. sank 0.5 percent in a fifth day of declines in Hong Kong.
New home sales fell 47 percent over the May 1-3 holidays to the lowest level in four years in 54 cities, Centaline Group said in a report dated yesterday. The value of China’s residential sales slumped 7.7 percent in the first quarter after money supply grew at the slowest pace on record in March amid an economic slowdown.
“Property prices will correct this year in China,” Gao Jian, an analyst at Northeast Securities Co., said by phone from Shanghai. “Sales volume is retreating. I don’t see a suitable entry point for property stocks for now.”
The Shanghai property stock index slid 1.5 percent, taking its losses for the year to 4.6 percent. The benchmark Shanghai Composite Index has dropped 4.2 percent in the period.
Developers including China Vanke Co. and Greentown China Holdings Ltd. have cut prices, and discounts have spread from smaller cities with “a massive” oversupply to big cities including Shanghai and Guangzhou where demand remains strong, according to an April 28 report by China Real Estate Information Corp., a property data and consulting firm.
Contracted home sales will remain weak in the second quarter due to tight bank liquidity and weakened market sentiment, Moody’s Investors Service said on April 28.
Beijing’s existing home sales fell 82 percent during the May holidays to 31 units, the lowest level since 2009, Beijing Times reported today, citing Home Link data.
To contact the reporter on this story: Weiyi Lim in Singapore at email@example.com
To contact the editors responsible for this story: Michael Patterson at firstname.lastname@example.org Richard Frost, Allen Wan