Chinese developer shares plunge after property curbs
Chinese developer shares plunge after property curbs
Dongguan the latest Chinese city to rein in surging market
Shares in China’s real estate firms faltered steeply after a wave of cooling measures swept bubbly housing markets during the week-long holidays around National Day.
Staggering losses by mainland developers such as Poly Real Estate Group Co and Beijing Capital Development Co reduced A-shares in Shanghai by 1.9 percent at the close, the most since Sept. 26, reported Bloomberg. On the Shenzhen exchange, firms like Vanke tumbled 5 percent.
Dongguan added yesterday to a growing list of cities that have announced reins to their frothy property markets. Housing officials in the city issued a directive forbidding the online registration of home purchases priced 15 percent higher or lower than recorded price levels.
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Around 20 mainland China cities, covering both tier-1 and tier-2 markets, have unleashed this month a flurry of property curbs to calm surging home values. The Shanghai government announced last week that it would require approval of price increases in pre-sales of new homes and increase the land supply.
Property share prices may eventually still see a climb, albeit a very slow one, according to Jingyi Pan, a Singapore-based strategist at IG Asia Pte. “The plunge is an initial reaction to the property curbs,” Jingyu told Bloomberg. “Authorities are keen to tame surging prices, but we are not expecting a tumble as it will not be in their interest.
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Source: Property Report