China Vanke Co, the countrys biggest listed real estate developer, hopes to increase its sales volumes this year by about 10 percent as the housing market pulls out a deep slump. In an interview with Reuters over the weekend, Executive Vice President Shirley Xiao tentatively forecast a 7-8 percent rebound in volumes for the property industry as a whole after a 20 percent plunge in 2008.
Sales in big cities rose smartly in the first quarter as price cuts and cheaper mortgages revived demand, but Xiao described the market as still quite fragile and said it would be too simple to declare the all-clear for the broader economy. "The residential housing market has recovered quite a lot, but not the macroeconomy," she said at Vankes headquarters in the southern boomtown of Shenzhen, which adjoins Hong Kong.
"The most uncertain thing is still the macroeconomy: how the world economy - how trade - will affect the Chinese economy and peoples confidence and incomes," she said. Xiaos guarded confidence that sales this year will improve "about 10 percent - something like that" is partly rooted in a judgment that prices are now back down at what she calls reasonable levels in the Pearl River Delta, which accounts for 30-40 percent of Vankes business.
Average transaction prices in Shenzhen in the first two months of 2009 fell 27.3 percent from a year earlier to 11,175 yuan ($1,634) per square metre, according to property consultants Savills. Vanke itself cut prices by 10-15 percent last year, when it sold 5.57 million square metres of space worth 47.87 billion yuan, down 9.2 percent and 8.6 percent respectively from 2007.
Housing statistics certainly point to glimmers of light in a sector that is crucial for the broader Chinese economy, accounting for nearly a quarter of fixed asset investment. Local government figures for March show residential property sales rose 55 percent in Beijing, 76 percent in Shanghai and 56 percent in Shenzhen, according to Andy Rothman at brokers CLSA. Compared with March 2008, the increases were 66 percent, 27 percent and 146 percent respectively.
Still, analysts are wary of reading too much into the bounce.
Na Liu, a commodities analyst at Scotia Capital, said developers were concentrating on clearing inventory; land sales dropped 30 percent in the first two months, new land development shrank 15.5 percent and new home starts fell 14.8 percent.
Swiss ready to help boost IMF reserves: minister
GENEVA: Switzerland is ready to take part in a bid by major economies to boost the International Monetary Funds reserves, Finance Minister Hans-Rudolf Merz said in a newspaper interview Sunday.
Leaders at a Group of 20 summit last Thursday agreed to triple the IMFs lending capacity to 750 billion dollars (556 billion euros).
Merz said Switzerland had to share in the effort when the move was formally approved at the IMF and World Banks Spring meetings on April 25 to 26.
"I estimate that Switzerland would be able to grant the IMF an additional credit limit of a maximum of 10 billion dollars," he told the NZZ am Sonntag.
Merz said it would be "foolish and negligent" not to take part in the refinancing effort because of its influence on global economic stability.
The G20 also launched a crackdown on international tax evasion at the summit, maintaining pressure on Switzerland and other financial centres to carry out pledges to ease banking secrecy.-AFP
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