China developer Vanke says property market has bottomed

China Overseas Property Holdings

29/06/2022 05:36

HONG KONG, June 29 (Reuters) - Major homebuilder China Vanke
Co  000002.SZ  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  .CSI000952  up 6%, while
Hong Kong's Hang Seng Mainland Properties Index  .HSMPI  rose
over 1%.
    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% 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% from a year earlier, although the
pace of the fall slowed in May for the first time in three
months.  urn:newsml:reuters.com:*:nL1N2Y203G
    "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%, while its Hong
Kong-listed shares gained 4%. 
    Property management shares also firmed, with China Overseas
Property Holdings  2669.HK  and Sunac Services Holdings
 1516.HK  both up over 6%. 
    

 (Reporting by Clare Jim; editing by Richard Pullin)
 ((clare.jim@thomsonreuters.com;))