While Chinese developers continue to delay home sales, their Singaporean counterparts are moving ahead with the launches of their Chinese projects.
However, some Singaporean developers admitted that they will be closely monitoring the market before making future launches. Demand from homebuyers is expected to soften over the coming months as the impact of recent tightening measures in China kick in.
Previously, property signing in Beijing dropped roughly 70 percent to 3,357 in May from April, according to the Shanghai Securities News.
In Shanghai, transactions may have slumped nearly 70 percent to 2,550 signings and sales in Shenzhen plunged 62 percent, the news agency reported.
However, the country’s five leading developers stated that they have yet to see a substantial drop-off in home sales.
CapitaLand, which has around 20,000 units in the pipeline in China, claimed that they sold over 200 homes in April and May. A company spokesperson added that it remains “on track” to launch three new residential projects by the second half of 2010.
Keppel Land also said that there are no changes in the launch schedule of its projects, which for this year are mostly townships.
“We target to launch another 3,400 homes across different cities in China this year, although we will monitor the market closely and adjust our sale launches accordingly,” a spokesman from Keppel Land said.
Sales of Keppel Land’s properties in China have been “encouraging”. The company claimed that it sold more than 900 homes in its townships in April and May.
China-based firm Yanlord Land said that its development schedule and delivery remains “on track”. Meanwhile, GuocoLand, which has 1,176 residential unit projects in Tianjin City in its list, is currently monitoring the market before finalizing a launch date.
In the interim, most property developers are preparing for a short-term drop in transaction volumes.
“The market remains volatile owing to concerns over new and potential government tightening measures,” said a Yanlord Land spokesman. “Many homebuyers have adopted a more cautious approach towards purchases, and this may lead to near-term softening of demand over the next 3-6 months.”
Ong Chong Hua, executive director from Ho Bee Investment, said “The tightening measures are expected to continue to cool the market in terms of volume as well as capital values for the rest of the year.”
Nonetheless, the measures are healthy as they will generate more healthy and sustainable residential market and prevent a bubble from forming. Mr. Ong added, “In the mid to longer term, we are very confident about the residential market as it is underpinned by the shortage of homes to house a huge population base which has become more affluent through the last decade of rapid economic growth.”
The projects of Ho Bee in China are still in the initial phases of development and design as such there are no launches planned yet. Also, Keppel Land expects buying volume to wind down in the short term.
In recent weeks, the government of China has announced several measures to stabilize the property market as it attempts to peel back a stimulus scheme and a US$1.4 trillion lending binge to restore financial growth, while raising asset bubbles risk.
The Chinese government has curbed loans for third-home purchases, restricted pre-sales by developers, tightened downpayment requirements for second-home purchases and raised minimum mortgage rates.