Xintiandi developer denies market bubble
- Source: Global Times
- [10:39 July 05 2010]
- Comments
Vendors pass new apartments in Shanghai. Property prices rose 12.4 percent year-on-year in May, the second-fastest pace after April's 12.8 percent gain. Photo: CFP
By Zhou Mi
The chairman of the developer of Shanghai's Xintiandi retail and leisure complex has denied that there is a bubble in China's real estate market, and said that growth will continue, driven by demand from house buyers.
"I think there is no bubble in China's real estate market, as the rigid demand for housing is still growing," Lo Hong-sui, chairman of Shui On Group, the parent company of Xintiandi developer Shui On Land, told the Global Times at a conference at Tongji University on Friday. He added that Shui On Land has no plans to reduce the sales price of its properties.
"With the economy growing fast and people's income surging, the land supply from the government is still very short," Lo said. "Thus, demand for houses will still be a major engine for market growth. The speculation in the Chinese mainland's real estate market, especially for luxury housing, is not as severe as in Hong Kong."
Lo added that he is "very optimistic" that Shui On Land will meet its Chinese mainland sales revenue target of 6 billion yuan ($886 million) for 2010, a goal he set before the central government issued its policies aimed at cooling down the residential real estate market. "Although the situation is not as good as in the past, when the space in a new building would sell out immediately, it is still not bad," said Lo.
"I think Shui On Land's attitude is mirrored by other high-end residential develop-ers," Ma Ji, senior manager of Centaline Property, the largest real estate agency in Shanghai by market share, told the Global Times Sunday. "The housing market's revenue growth is just slowing, without being seriously impacted by the government's policies."
However, Poly Real Estate Group and Greenland Group, two large Chinese developers, have reduced their residential property prices by 10 to 20 percent recently.
"Some developers are facing pressure from shrinking turnover, so they will have to make some compromises," said Ma.
"The fundamental problem in China's real estate market is the shortage of land," Yin Kunhua, professor of the Real Estate Research Center at the Shanghai University of Finance and Economics, said.
