Developer stocks boosted as Shanghai home deals pick up

Staff reporter

Shares of mainland developers rose yesterday amid news that Shanghai's housing transactions grew for a four month in a row despite a slower-than-expected recovery in home prices.

The Chinese city's new and secondhand housing deals totaled 1.88 million square meters in August, 14 percent higher than one year ago.

The figure also marked a fourth consecutive month of growth since May.

The growth was mainly attributed to the secondary market, which saw the traded gross floor area jump 25 percent from one year ago to 1.35 million sq m.

But the gross floor area of new homes sold fell 7 percent to 530,000 sq m over the same period.

In Hong Kong, the blue-chip China Overseas Land & Investment (0688) rose 8.6 percent at one point, before ending 0.5 percent higher at HK$11.86 per share.

Longfor (0960) closed at HK$8.63 apiece, 1.89 percent higher, while state giant China Resources Land (1109) inched up to HK$21.05.

Shimao (0813) rose 6.6 percent, Cifi's (0884) by 4.4 percent and China Vanke (2202) by 3.3 percent.

Yuexiu Property (0123) recorded a rise of 2.28 percent and Agile Group (3383) went up 1.22 percent.

New home prices in Shanghai edged up 0.2 percent and second-hand homes by 0.1 percent in July, while prices in the other three tier-one cities remained unchanged or declined.

JP Morgan believes China's property market will stabilize next year at the earliest. The investment bank said the effect of an array of supportive policies is not "satisfactory."