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Independent Singapore
20-05-2025
- Business
- Independent Singapore
China's property market finds its footing as rate cuts and rescue funds boost confidence
BEIJING: Home prices in central China's key metropolises stayed fixed in April, indicating upward stability in the housing market after several months of turmoil and volatility, thanks to decreased borrowing charges and a heap of state-led actions to resuscitate the sector. Price movements and marginal drops Based on official figures issued by the National Bureau of Statistics, published by the latest South China Morning Post report, the latest home prices across China's four top-tier cities — Beijing, Guangzhou, Shenzhen, and Shanghai — continued to be unaffected from March, after a modest 0.1% rise in the preceding month. Second-tier cities also did not witness any price movement; however, third-tier cities suffered a 0.2% weakening. Of the first-tier cities, Beijing and Shanghai gained slight improvements of 0.1% and 0.5%, respectively. In contrast, Guangzhou and Shenzhen witnessed marginal drops of 0.2% and 0.1%. 'This marks a phased victory for cities at all levels,' said Yan Yuejin, vice-president of the E-House China Real Estate Research Institute in Shanghai. 'But sustained momentum in the second quarter will be key to maintaining this recovery.' The market's recent solidity came after a succession of easing measures. Previously this month, the People's Bank of China dropped the mortgage rate for first-time homebuyers utilising housing provident reserves to a significant low of 2.6%. Temporarily, commercial banks have permitted an astounding 6.7 trillion yuan (US$929 billion) in credits to fund approximately 16 million housing units under the régime's 'whitelist' program for economically vital undertakings. Beijing has been under a growing burden to resuscitate the real estate segment, a foundation of the Chinese economy, as export-driven seaside districts confront headwinds from shifting global demands and intensifying trade tensions, mainly with the United States. Goldman Sachs stated in a report that supplementary policy backing, including added mortgage rate slashes, extended credit for 'whitelist' ventures, and fast-tracked home-buying initiatives by local governments, could help lessen larger economic threats and sustain housing stability. Return of buyer confidence Investor sentiment seems to be improving. The Hang Seng Mainland Properties Index, which follows 10 key developers listed in Hong Kong, has climbed 10% so far this year. The wide-ranging CSI 300 Index, reflecting China's prime publicly traded businesses, has also edged up by 2.7%. See also China flying its Wuhan citizens overseas back home While the path to complete recovery is still undefined, April's statistics imply that China's beleaguered property market may be creeping closer to a decisive moment, sustained by a synchronised policy push and a careful reappearance of consumer confidence.
Business Times
19-05-2025
- Business
- Business Times
Vanke bond's 144% rally shows credit strain easing after rescue
FINANCIAL strains are easing at China Vanke after its largest state shareholder threw a lifeline to the company that proved too big to fail. Since local government officials intervened in January to stabilise Vanke's operations and finances, the builder has repaid publicly traded bonds with a combined principal of 14.4 billion yuan (S$2.6 billion). That included a 3.15 per cent US dollar bond with US$423 million outstanding which matured on May 12, its only such note of the year, Bloomberg reported. In four months, its longer dated US dollar bonds have bounced more than 44 US cents to above 74 US cents on the US dollar. While that's still a distressed level, the move suggests investors holding such assets since Jan 16 through the turmoil this year may have amassed a return of nearly 144 per cent as of May 16. Vanke's stocks remain lacklustre, with its Hong Kong and mainland-traded shares both down about 6 per cent since the late January overhaul. 'Near-term default risks have likely abated, considering the expectation of shareholder support,' Leonard Law, a senior credit analyst in Lucror Analytics Singapore, wrote in a note last week. Government rescue efforts for Vanke are trickling out. Since late April, Vanke announced it received two generous loans from its largest shareholder Shenzhen Metro Group. Vanke may prepay at any time, extend the repayment period with the lender's consent, and is allowed to pay the interest together with the principal at maturity, according to terms disclosed in exchange filings. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up A total of US$6.1 billion of Vanke's debt has emerged from distressed trading levels since Jan 17, according to data compiled by Bloomberg News. The recent two loans stood out from the previous ones extended around February, as no requests for asset pledging were mentioned. 'These two loans without collateral signal Shenzhen Metro has stepped up its support for Vanke,' said Yan Yuejin, vice-president of Shanghai E-house's research arm. All of Shenzhen Metro's four loans this year carry a floating interest rate of 76 basis points lower than China's benchmark lending rate for short-term loans, which stood at 2.34 per cent as at early May. They are all earmarked to help Vanke repay principal and interest on publicly issued bonds, filings showed. 'We recognise Vanke's efforts to fulfil delivery and debt obligations,' with state help, Citigroup analysts led by Griffin Chan wrote in a May 1 report. Still, the Wall Street bank downgraded the company's stock to neutral due to its continued losses. Concerns linger Despite state backing, Vanke is not completely out of the woods. The builder and its subsidiaries still have 25.4 billion yuan of onshore bonds maturing or facing redemption this year, according to data compiled by Bloomberg. The maturity wall comes as the developer's contract sales continued to weaken, which is set to widen its funding gap, according to Bloomberg Intelligence analysts Kristy Hung and Monica Si. Fitch Ratings downgraded Vanke's long-term issuer default score by one notch to CCC+, a rating that indicates a default is a real possibility. Vanke's sales declined nearly 40 per cent on year in the first quarter, worse than Fitch's expectation of a 20 per cent full-year decline. The drop widened to 45 per cent in April from a year prior, according to China Real Estate Information Corp, more severe than an 8.7 per cent drop seen in peers. 'We expect the weak fundamentals for Vanke to continue without a rosy recovery of the overall sector,' Iris Chen, a credit desk analyst at Nomura International HK, wrote in a recent note in April. BLOOMBERG
South China Morning Post
19-05-2025
- Business
- South China Morning Post
China's new home prices stabilise as rate cut, lifeline funding lift market confidence
Home prices in major cities in mainland China stabilised, holding onto recent gains as lower borrowing costs and state-led measures to support developers helped inject confidence in the market. Advertisement Prices of new homes in China's four first-tier cities were unchanged in April from a month ago, following a 0.1 per cent rise in March, according to data covering 70 large and medium-sized cities published by the statistics bureau on Monday. Prices in second-tier cities were also unchanged, while those in third-tier cities slipped 0.2 per cent, it added. Beijing and Shanghai recorded a 0.1 per cent and 0.5 per cent gain, respectively, while those in Guangzhou and Shenzhen declined 0.2 and 0.1 per cent, the report showed. 'This marks a phased victory for cities at all levels,' said Yan Yuejin, vice-president of E-House China Real Estate Research Institute in Shanghai. 'Continued momentum will be needed in the second quarter' to sustain the market recovery over the past seven months, he added. 08:23 China unveils policy package to guard against US tariffs ahead of trade talks in Switzerland China unveils policy package to guard against US tariffs ahead of trade talks in Switzerland China's central bank cut the mortgage rate on housing provident funds by a quarter-point cut on May 7 for first-time homebuyers, bringing it down to a record low 2.6 per cent. The nation's commercial banks have also approved 6.7 trillion yuan (US$929 billion) of loans to 'whitelist' housing projects to date, covering nearly 16 million homes, it added.
The Star
09-05-2025
- Business
- The Star
China property initiatives to get house in better order
BEIJING: In a tone-setting conference, China's policymakers have outlined specific property measures focused on risk prevention, stock optimisation and supply improvement, which is key to the stable and healthy development of the real estate sector, say industry experts. Being an important pillar of the nation's economy, the property market is closely associated with overall economic performance, including financial policies and capital markets. Therefore, bolstering real estate market stability calls for consistent efforts and further supportive measures, they said. The Political Bureau of the Communist Party of China Central Committee held a meeting to analyse and study the current economic situation and overall economic work. The meeting affirmed the positive changes observed in the real estate sector over the past two quarters. Thanks to a series of supportive housing policies, property sales, prices and land markets in major cities have shown signs of stabilising after a period of gradual decline, laying a solid foundation for further recovery. Two major strategic directions were highlighted. These were the intensification of urban renewal initiatives, including the orderly advancement of urban villages and dilapidated housing renovations, and seondly, the acceleration of the establishment of a new real estate development model. 'The meeting further stressed the significance of urban regeneration, and urged greater efforts to promote the renovation of urban villages and dilapidated houses,' said Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute. 'This is also one of the key tasks for the year 2025, as the renovation of urban villages would not only improve people's living environments, but also activate more market demand,' Yan said. — China Daily/ANN
South China Morning Post
17-03-2025
- Business
- South China Morning Post
China's home prices drop for 21st straight month as property recovery remains elusive
China's new-home prices fell for the 21st straight month in February as a recovery continued to elude the key economic sector, underscoring the need for more bold measures to stabilise the market. Advertisement Across 70 mainland cities, February new-home prices dropped 0.1 per cent month on month, the same decline recorded in January, according to data released by the National Bureau of Statistics (NBS) on Monday. Prices for new homes fell 5.2 per cent year on year, slightly less steep than the 5.4 per cent year-on-year drop in January. Second-hand home prices fell 0.3 per cent month on month in February across the 70 cities, the same decline as in January. On an annual basis, they fell 7.5 per cent, adding to a 7.8 per cent loss in January. 'Since February is a traditionally slow season for the market, such a decrease is normal,' said Yan Yuejin, vice-president of Shanghai-based E-House China Real Estate Research Institute. 'In the first half of the year, the housing price index will experience a continued narrowing of declines, with some cities leading the price increases.' Across China's four top-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – new-home prices edged up 0.1 per cent month on month in February, the same increase as January. Second-hand home prices in those cities lost 0.1 per cent last month, after a 0.1 per cent gain in January. Advertisement New-homes prices were unchanged in second-tier cities, including Tianjin, Wuhan and Chengdu, compared with a 0.1 per cent rise in January. Prices of second-hand homes in those cities slipped 0.4 per cent, adding to a 0.1 per cent drop in January.
