Top Chinese developers’ sales up slightly in September following Beijing support

Analysts question sustainability of gains given uncertainty surrounding the government’s plans for future stimulus

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People passed a Country Garden development in Foshan, China. Photo: Bloomberg

Yuke Xiein BeijingandYulu Aoin Hong Kong

Published: 8:30am, 16 Oct 2024Updated: 9:09am, 16 Oct 2024

Sales for China’s largest developers edged up in September after Beijing rolled out a programme to support the struggling property market, as China Vanke, Country Garden Holdings and Shimao Property Holdings reported month-on-month growth.

But analysts said given the uncertainty surrounding the government’s plans for stimulus in the future, are the gains sustainable?

Shanghai-based Shimao reported a 13.1 per cent month-on-month increase in contracted sales, which reached 2.9 billion yuan (US$415.4 million) in September, according to a Monday filing with the Hong Kong stock exchange. Sales rose 45.5 per cent from a year earlier, as sentiment improved after the People’s Bank of China last month cut mortgage rates and down payment requirements, while local governments eased restrictions for homebuyers.

Meanwhile, China Vanke recorded new home sales worth 10 billion yuan during the weeklong “golden week” holiday. And Country Garden said the number of people who indicated they were interested in a project by paying a deposit surged 34 per cent when compared with another weeklong holiday back in May.

“The upticks in sales for September are mainly thanks to a low base last year, and the figures do not tell the bigger picture,” said Raymond Cheng, a managing director at CGS International Securities in Hong Kong.

“But we do see a strong sales rebound in October, especially during the golden week, which is expected to be translated into the first year-on-year increase in sales this year for some major developers.”

An overall sales recovery is also expected for the final quarter as the stimulus effects gradually take hold, he said.