Developers raise sales targets for 2012

Some property developers have raised their sales targets for 2012 amid a warming housing market led by the government's monetary policy easing, but industry insiders said Monday that a substantial rebound in prices is unlikely in the second half of the year.

Hong Kong-listed Shimao Property Holdings Ltd, one of China's top 10 developers, has raised its sales target for 2012 to 35 billion yuan ($5.5 billion) from 30.9 billion yuan set early this year, said He Tian, a director at the China Index Academy under Soufun, China's largest online property website.

He told the Global Times that another Hong Kong-listed firm China Overseas Property has already achieved 80 percent of its annual target by the end of June. Other large developers such as Vanke, Country Garden, and Evergrande Real Estate Group were also close to achieving their half-year sales targets, he noted.

"It is not surprising that some developers have raised their sales targets for this year," Chen Guoqiang, deputy director of the China Real Estate Society, told the Global Times Monday.

Many of the developers had set a much lower sales target for 2012 due to a bleak outlook of the property market under the government's tight credit policies as well as curbs on the housing sector in 2011.

However, as the housing market began to recover in May and June, developers may decide to adjust their year-end targets, Chen said.

The transactions of high-end residential property also grew in the second quarter over the first quarter and from the same period a year ago, Qin Xiaomei, head of research with Jones Lang LaSalle in Beijing, told the Global Times.

China began to ease its monetary policies since May to revive the stuttering economy and policymakers allowed banks to offer discounts on mortgage rates for first home buyers, which released some rigid housing demand.

Though government officials have reiterated on numerous occasions that the country will stick to its housing control policy, changes in the macroeconomic situation have reinforced expectations that controls will not be intensified and that the housing market has bottomed out.

However, with the housing control policy still in place, a few developers recording higher sales does not mean that the difficult period of the industry is over, Chen said, predicting that a large number of unsold houses will weigh on the housing market.

With an increase in housing supply, it is unlikely that the prices will rebound, especially in the second- and third-tier cities, in the second half of the year, said He.