Despite reports of a property bubble in China, SGX-listed and Chinese developer CWG International plans to accelerate its expansion domestically while also embarking on new projects in the US and Australia this year, reported Business Times.
This comes as the property cooling measures set up by the Chinese government has stamped out speculation, leaving only latent demand for owner-occupation, explained Qian Jianrong, executive chairman and CEO of CWG International.
Notably, the restrictions on purchases as well as the issuance of pre-sale licences to property developers created pent-up demand while the price curbs on new sales have been counter-productive as it spurred a continued rush of buyers.
“I don’t see the bubble,” said Qian. “The Chinese need to pay 30 to 50 percent down payment when they buy homes. There are no speculators in the market now that many cities do not allow the use of mortgages to buy a third property. Many banking chiefs tell me their best assets are individual borrowings because the defaults are so low.”
In fact, the company’s residential projects in China such as the Nanjing Royal Lake Mansion sold 183 of the 198 units released in one day.
“Even though prices of first-hand homes are controlled by the government, our selling prices still exceeded the estimates we had when we first bought the land because land prices have shot up so much,” he added.
This article was edited by Denise Djong.
