Following a combination of bearish reports from property market analysts and weaker-than-expected home sales data published last week, concerns are being highlighted among overseas investors of a credit crunch in the Chinese property sector.
Last week’s official government data showed property sales in the first quarter were down 7.7 percent quarter-on quarter, while market analysts also highlighted evidence which suggested that property developers were reducing selling prices.
This double whammy of weaker sales and lower prices has raised serious concerns in the minds of some property investors.
Quoted by the IFR Asia website, an unnamed hedge fund manager said: “There are concerns about China property as bond issuers have bought a lot of land. So, they are building up inventory. If you are cutting prices and don’t sell, that is bad.”
Another unidentified asset manager in Singapore added that asset turnover has decelerated, and so have gross margins for the sector – a twin drop that also gives cause for concern.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
Our editors’ pick of recent stories you may have missed:
Ultra-high-net-worths pump US$217 billion into Singapore real estate
Commonwealth Towers sees 175 units taken up
Some 13 new launches planned in coming months
Sims Avenue site attracts top bid of S$530.9 million
… and from our lifestyle section.
Five smart things to do with your money
Tree-rific tree houses from around the world
Nine things to consider before buying a HDB flat
If you have a property story you want us to publish email: andrew@propertyguru.com.sg