Real Estate Expected to Cool in 2H

Fast FT: Moody’s calls peak for China home sales growth
A new report from the company on Chinese real estate suggests nationwide home sales growth has peaked, predicting the rate of growth will moderate to a single-digit speed for the 12 months ending May 2017. That would be down from 32.2 per cent year-on-year for the 12 months ended May 2016 as a favourable basis for comparison drops out and stimulus measures prove less effective.

The report also forecast the recent rise in land prices would increase margin pressures and risk for mainland property developers.
More on the Moody's report from SCMP: Soaring land prices continue to shrink developers’ margins
“The unit land costs for a number of these purchases were also close to secondary market housing prices in surrounding areas, implying an increased risk of squeezed profit margins over the next two to three years if the growth in property prices falls below developers’ expectations, ” he wrote in a new research note.
Bloomberg: Sunac Suspends Land Buying in China Auctions as Prices Surge
“We’ve suspended all bidding recently and didn’t even sign up” for auctions by local governments, Sun said at a briefing in Hefei of eastern Anhui province on Tuesday. “I feel the risk is too high,” he said without giving a time frame for the suspension, according to a transcript provided by the company.
Related: Regulators to Developers: Take the High Ground, Stop Chasing Land Prices

Bloomberg: Headwinds Loom for Hong Kong Land Amid Rising Supply, Few Takers
Builders including Sun Hung Kai Properties Ltd., the city’s largest by market capitalization, Cheung Kong Property Holdings Ltd. and Henderson Land Development Co. have been absent from the list of winning bidders for the eight parcels of land tendered by the government in the first half, as average land prices fell. They’ve been reluctant to stock up as home prices have slumped and sales of existing projects have been sluggish.
SCMP: Hong Kong sticks to land sale targets, with supply for about 9,500 units on track in six-months to September

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