[ET Net News Agency, 21 August 2018] HSBC Global Research said it visited ten property
projects from six developers, namely China Jinmao (00817), Country Garden (02007), Logan
Property (03380), Sunac China (01918), Times China (01233) and Yanlord Land, across three
cities - Shenzhen (first-tier city), Tianjin (second-tier city) and Huizhou (third-tier
city) over the weekend (18-19 August).
While demand for primary residential properties in these cities looks robust, as
evidenced by the crowded sales offices and show flats, the research house sees various
challenges ahead.
HSBC noted mortgage availability is still tight despite media reports of loosening. Most
of the property projects it visited are shifting the mortgage financing arrangement of
buyers to joint-stock commercial banks (e.g. China Everbright Bank, China Merchants Bank,
CITIC Bank, Minsheng Bank) away from the big 4 Chinese banks (i.e. ABC, BOC, CCB and
ICBC), which have more stringent loan approval criteria and hence slower mortgage
disbursement.
Yet, according to property sales managers on the ground, loan quotas at the joint-stock
commercial banks are smaller than at the big 4. Mortgage availability tightness could lead
to a lower cash collection ratio on contracted sales for China developers in 2018 versus
2017. (KL)