Singapore developer Capitaland plans to launch its first value housing project in China in the next few weeks.
This will be the company’s maiden foray into the middle-income mass housing market and it is expected to be the next driver of growth for the property firm in China.
When CapitaLand China released its first high-end homes in Hangzhou for sale last month, some 100 units were snapped up in two hours, generating 229 million yuan in total sales value.
The Singapore developer is now eyeing China’s entry-level mass housing market.
It said it is optimistic about sales for the project called The Lakeside in Wuhan, which will be priced from 7,000 to 8,000 yuan per square metre.
Harold Woo, senior vice president for investor relations at CapitaLand, said: “It actually fits in a niche for the really young graduates who can’t afford to buy the private housing but yet at the same time, most of these (sites) are not at the city centre, they are probably 45 to 50 minutes to the city centre, but they are well-connected to a public network.
“So they are happy to commute and travel that distance and yet be able to afford to build their first home.”
The firm has two other similar projects in Shanghai and one in Guangzhou.
They are expected to be released for sale latest by the first quarter of 2013.
All four projects will total some 6,300 units.
The developer has good reason to be bullish about China’s overall property sector.
Despite the buying restrictions imposed by the Chinese government, CapitaLand sold more homes in the first nine months of this year compared to 2011.
The third quarter alone saw over 900 units taken up, a year-on-year increase of 180 per cent.
Mr Woo said: “A lot of people kept away during the housing restrictions, and they were expecting maybe the government to put more measures. The momentum has carried through.
“So I think we are quite positive that sales volume is hopefully going to precede some price increase. On our own projects, we have managed to inch up on a blended basis, price upwards of about 4 odd per cent.”
CapitaLand expects the home buying restrictions in China to remain unchanged for at least the first half of 2013. But it also expects more monetary easing measures from the government to stimulate the economy. And according to the developer, that, coupled with more pent-up demand from homebuyers, will continue to drive the housing market in China next year.
Source : Channel NewsAsia – 5 Nov 2012