Chinese developers delay new home sales
Some Chinese developers are playing a game of cat-and-mouse with local governments by delaying the launch of new home sales in the hope of riding out tightening measures in the property market that have dampened prices in some major cities. They hope that when authorities start to relax some restrictions, buyers will clamour to buy new homes and they can release more supply at higher prices. Official data last week showed new home prices fell in January in 11 of 15 major cities from December levels. Prices in Beijing, Hangzhou and Chengdu were flat and Guangzhou was the only major city that posted a rise. More broadly, average home prices in the 70 cities covered by the data rose just 0.2 percent from the month before, a slowdown in price growth for the fourth straight month. “Concentrating projects in resource heavy states will also put more strain on the transmission grid. It remains to be seen if investments in grid can keep up with increases in generation capacity and inter-state flows of power,” it said. "We just wait and we won't sell now," said a Shanghai-based developer, referring to a development in the financial city. The official requested anonymity as the issue is sensitive. Only big developers had the financial flexibility to delay projects, the officials said. "We're in no rush (to sell) but realistically we can't wait too long; one year is not possible," this developer said. "It's a game with the government. "For developers who have inventory pressure and want to build good relationships with the government in order to have better land access in the future, they may compromise. But some are willing to wait to seek higher profits."
Tags : INTERNATIONAL