Tuesday, July 6, 2010

Glorious Property cautious on H2 sales outlook

(HONG KONG) Chinese developer Glorious Property says it is cautious about the outlook for sales later this year, after the central government unveiled harsh measures to rein in the red-hot property sector.

The Shanghai-based developer logged contracted sales of 4.2 billion yuan (S$862 million) in the first six months of this year, up about a third from the same period a year earlier, senior executives said yesterday. In June alone, contracted sales were 890 million yuan, up from about 220 million yuan in May, they said, adding that there were uncertainties for the remainder of the year.

'We are quite cautious about the second half. We'll mainly be monitoring property policies - whether the government adopts a tightening or loosening attitude,' CEO Cheng Lixiong told a news conference here.

In mid-April, China announced a series of property measures to tighten the market, such as raising minimum downpayments and mortgage rates for second homes, and raising downpayments for first-home buyers purchasing huge apartments.

Urban property prices rose an annual 12.4 per cent in May, easing from April when prices climbed at a record pace, government data showed. Compared with April, May prices were up 0.2 per cent, also trending lower.

The tightening measures, coupled with Europe's debt crisis, are also prompting the developer to put its plans to issue a dollar bond on hold. 'The debt market is too volatile now. We feel that it's not the right time to issue the bonds because of demand uncertainty and the costs of issuing,' Mr Cheng said. -- Reuters

Source: Business Times, 6 Jul 2010

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