China property market remains resilient, says CDL

Despite China's recent stock market volatility and yuan devaluation, its property market has stayed resilient, says City Developments (CDL).

"The market is at a price point where we are active - 20,000 to 30,000 yuan (S$6,593) per sq m for residential sales outside of Shanghai... There is clear demand at that price point," chief executive Grant Kelley said yesterday. "China may surprise on the upside, and present buy side opportunities."

In China, CDL has sold about 281 units at Hong Leong City Centre in Suzhou Industrial Park ahead of its official launch - the best-selling residential offering in the industrial park this year by far, he said. It expects to launch luxury Eling Residences in Chongqing in the fourth quarter and has paused work on its Huang Huayuan mixed-use project there, with plans to likely design smaller units to fit the price point of about 20,000 yuan per sq m.

But Mr Kelley also noted that given the volatility in many markets, "one needs to be very careful for the next couple of months".

The devaluation has not been big enough to affect Chinese buyers of properties here, said CDL group general manager Chia Ngiang Hong. Rather, numbers have been declining since last year due to Beijing's scrutiny of the flow of Chinese funds overseas.

There were no drastic drops recently, Mr Chia said.

"(Chinese home) purchases islandwide has decreased generally but what is glaring to us is high-end homes and Sentosa bungalows," said Savills Residential executive director Phylicia Ang. The continued decline in foreign buyers overall is also due to the removal of the Foreign Investment Scheme in April 2012, which had fast-tracked overseas nationals' application for permanent residency status, she said.

With the yuan devaluation, high- income buyers could view residential properties here as a good store of value; but buying could be stemmed especially in the suburban market, added DTZ regional head of research Lee Nai Jia. "It will definitely affect the number of home purchases by mainland Chinese in the medium- to long-term if the yuan devaluation fails to boost the Chinese economy."

Rennie Whang

A version of this article appeared in the print edition of The Straits Times on August 14, 2015, with the headline 'China property market remains resilient, says CDL'. Print Edition | Subscribe