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China developer Vanke says property market has bottomed

China developer Vanke says property market has bottomed

FILE PHOTO: A Vanke sign is seen above workers working at the construction site of a residential building in Dalian, Liaoning province, China September 16, 2019. REUTERS/Stringer

HONG KONG : Major homebuilder China Vanke Co said the property market has bottomed in the short term, with a clear month-on-month rise in sales in June, sparking a property sector rally in Wednesday morning trade.

Yu Liang, chairman of China's No.2 developer, cautioned the recovery will be slow and mild, but his comments helped drive the mainland's CSI Real Estate Index up 6 per cent, while Hong Kong's Hang Seng Mainland Properties Index rose over 1 per cent.

Speaking at China Vanke's annual general meeting on Tuesday, Yu said he had experienced the most pressure in his career during 2022. However, he saw some recovery in the secondary housing market in June, with 50 per cent of first and second-tier cities recording higher asking prices.

On sales, Yu said: "In June, from the situation so far, I think there would be a relatively obvious rise month-on-month."

The recovery had been helped by easing measures from the central and local governments, and partly boosted by pent-up demand following months of COVID-related restrictions, he said.

Authorities are scrambling to boost weak demand after a fall in sales in recent months, depressed by tight COVID-19 curbs and a slowdown in the world's second-biggest economy.

Official data showed property sales by floor area in the first five months fell 23.6 per cent from a year earlier, although the pace of the fall slowed in May for the first time in three months.

"The market in the short term has bottomed. I didn't use 'rebounded', but rather 'recovered'. A recovery will still take time," Yu said.

Vanke's Shenzhen-listed shares rose over 6 per cent, while its Hong Kong-listed shares gained 4 per cent.

Property management shares also firmed, with China Overseas Property Holdings and Sunac Services Holdings both up over 6 per cent.

Source: Reuters
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