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Vanke uncertain over property market recovery

2014-12-15 09:58 Global Times/Agencies Web Editor: Qin Dexing

China Vanke Co Ltd, China's largest residential developer, said on Saturday that many cities were still suffering from excess housing supply, giving a less optimistic view than other developers who say the property market has bottomed out.

"Cities such as Beijing and Shanghai may be doing well, but many cities are facing great inventory pressure," Vanke president Yu Liang told reporters after a running race in Hong Kong.

"It's hard to say the industry is recovering at this stage."

China now requires an average of 13 months to clear inventory, he said.

"Home prices are not going up, but land prices are, making developers hesitate to purchase land because we may not make money," said Yu.

Vanke also said the impact of China's interest rate cut on November 21, the first reduction in two years, was limited, though beneficial, for the property sector.

The rate cut has spurred Chinese property shares to the highest level since December 2009, but property developers' business still only received a negligible lift, as sales slip and banks pull back on lending to the sector.

Real estate investment growth slowed in the first 11 months of 2014, official data showed on Friday, but property sales hit the highest level seen this year, indicating China's efforts to boost the ailing sector may be starting to pay off.

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