Improved property sales in October have given China’s cash-strapped developers more breathing room, as Beijing’s recent economic stimulus measures, which include mortgage rate cuts for homeowners, bolstered market confidence.
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China Vanke on Friday posted a 23 per cent month-on-month increase in contracted sales to 21.4 billion yuan (US$2.98 billion) in October. Beijing-based Longfor Group, one of the country’s top 10 developers by sales, posted a 37 per cent rise in contracted sales to 11.2 billion yuan.
China Jinmao, a subsidiary of state-owned Sinochem Corporation, saw a nearly 66 per cent surge in contracted sales from the previous month to 11.6 billion yuan.
“October’s sales data reflected the release of pent-up demand driven by the central bank’s rate cut and delays caused by the pandemic,” said Shen Meng, director at the Beijing-based investment firm Chanson & Company.
The sales data comes after the standing committee of China’s top legislature on Friday approved an additional 6 trillion yuan bond quota to help reduce local governments’ hidden debt and shore up the economy.
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The Ministry of Finance also pledged to “support relevant tax policies for the healthy development of the property market”, while acknowledging that special bonds could be used to acquire idle land and reduce excess housing inventory.