China Property Prices `Reasonable' says Billionaire Li Ka-shing

Billionaire Li Ka-shing said China’s property prices are “reasonable,” as government stimulus has sent prices soaring in the nation’s biggest cities, according to the Bloomberg News. “As a developer, I don’t think housing prices are surging too much in mainland China,” said Li, who spoke on Thursday at a press briefing accompanying earnings for CK Hutchison Holdings Ltd. and Cheung Kong Property Holdings Ltd. “People might have seen prices jump in one or two projects in Shenzhen, but in other Chinese cities, it probably only rose by less than 10 percent.” CK Property reported its first full-year earnings after Li spun off real estate assets from his conglomerate in June. The company, which announced an underlying profit of HK$15.6 billion ($2 billion), said the real estate market in Hong Kong and China remained challenging. In Hong Kong, home sales plunged to the lowest in 25 years last month. On the mainland, where the developer is also active, prices fell for most of last year amid uncertainty over the economy and a glut of homes before rebounding sharply in the latter part because of government stimulus. “Don’t speculate in the property market,” Li said at the briefing. No Easy Task CK Property said property prices in Hong Kong and China will continue to be affected by increases in construction costs as well as development and marketing expenses. The market, especially in Hong Kong, is also seeing increasing competition in land auctions from new entrants, the company said. “It is therefore not an easy task to acquire land at reasonable costs,” CK Property said. CK Property reported profit attributable to shareholders of HK$17.1 billion on revenue of HK$58.8 billion. The firm derived 60 percent of its full-year sales from China, recording sales of HK$29.4 billion. Sales reached HK$15.9 billion in Hong Kong, about 32 percent of the total, according to the earnings statement. “The property market conditions remained challenging in Hong Kong and on the mainland during last year,” according to the statement. “All development and marketing plans have proceeded cautiously according to their scheduled timetable.” CK Property indicated that it may seek to expand beyond the real estate business, without giving details. The company is “is open to considering various opportunities to generate revenue from other different sources,” it said. The firm didn’t provide any other details on its plans.