Credit Suisse noted that an increasing number
of tier 2 cities reintroducing cooling measures, mainly due to rising ASPs. While most are still loose, the research house believes all developers should be well-prepared for any possible tightening across the country.
CS continues to view positive free cash flow as key to share price outperformance.
It said Nanjing became the fourth tier 2 city (after Suzhou, Xiamen and Hangzhou) to reintroduce the home-purchase restrictions. Local residents with two apartments and non-local residents with one apartment are not allowed to buy any extra unit.
CS said China property sector has had a strong run over the past 2-3 weeks as developers reported encouraging presales. However, CS believes the rally should not be sustainable, given some developers' aggressive expansions that result in negative sector free cash flow on aggregate.
27/09/2016 17:46
[I-bank focus]Policy headwinds seen for China property
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