Property developer China Vanke is expecting a modest recovery in the real estate market, with its chairman saying the bottom has been reached after months of tumult.
Yu Liang, head of China’s second-largest developer, said he had experienced the most pressure in his career during 2022.
His comments helped to drive up the CSI Real Estate Index 6%, while Hong Kong’s Hang Seng Mainland Properties Index rose more than 1%.
Speaking at China Vanke’s annual general meeting, Yu said he foresaw some recovery in the secondary housing market in June, with 50% of first and second-tier cities recording higher asking prices.
On sales, Yu said: “In June, from the situation so far, I think there would be a relatively obvious rise month-on-month.”
The recovery had been helped by easing measures from the central and local governments, and partly boosted by pent-up demand following months of coronavirus pandemic-related restrictions, he said.
Authorities are scrambling to boost weak demand after a fall in sales in recent months, depressed by tight Covid-19 curbs and a slowdown in the world’s second-biggest economy.
Official data showed property sales by floor area in the first five months fell 23.6% from a year earlier, although the pace of the fall slowed in May for the first time in three months.
“The market in the short term has bottomed. I didn’t use [the word] ‘rebounded’, but rather ‘recovered’. A recovery will still take time,” Yu said.
China Vanke’s Shenzhen-listed shares rose over 6%, while its Hong Kong-listed shares gained 4%. Property management shares also firmed, with China Overseas Property Holdings and Sunac Services Holdings both up over 6%.
- Reuters, with additional editing by George Russell