China Vanke’s home sales stall in blurred picture for property
The real estate sector continues to weigh on the Chinese economy, despite a government rescue package unveiled in May
CHINA Vanke’s home sales growth stalled in June, amid signs of improvement elsewhere in China’s beleaguered housing market.
Contracted sales at the closely watched developer rose 7.9 per cent month on month to 25.1 billion yuan (S$4.7 billion), the Shenzhen-based company said. That compares with a 12 per cent month-on-month increase in May.
On an annual basis, sales in June were 31 per cent lower than last year, slightly worse than the previous month.
Vanke’s month-on-month increase in home sales compares to a 36 per cent rise at the 100 biggest real estate companies tracked by China Real Estate Information Corporation (CRIC).
Vanke is counting on a revival in home sales to generate cash needed to help repay creditors. The company – once considered a sound player in the sector given its state backing – has also been raising funds and exploring asset sales to fight off its liquidity crunch.
China has seen a mixed picture in the housing market since the government unveiled a rescue package in mid-May. Sales of new homes fell the least in 13 months in June from a year earlier, CRIC figures showed.
However, prices plunged at the fastest pace in almost a decade in May.
The real estate sector remains a drag on China’s economy, which is on track to undershoot the government’s official 5 per cent growth target for this year, Bloomberg Economics estimated this week. BLOOMBERG
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