BEIJING (Reuters) - Property developer Greentown China plans to spend heavily on land purchases in the second half of the year when bidding from its rivals is expected to recede, Chief Executive Cao Zhounan said on Thursday.
Land bids by Chinese real estate developers have unexpectedly remained strong this quarter, Cao said, but added that their ability to fund purchases would wane as government curbs on the red hot property market hurt sales.
“I originally thought the first quarter would be a good time to invest. But from what we’re seeing now we might have to wait until the third or fourth quarter,” Cao told Reuters in an interview in Beijing.
The Hangzhou-based developer plans to focus on core areas in major cities, he said.
China’s property sales surged in the first two months of the year despite government measures to cool the market, though growth in real estate investment showed signs of easing, according to official data on Tuesday.
Authorities have slammed a slew of property curbs on more than two dozen Chinese cities to clamp down on speculation, with prices soaring since October.
“Chinese developers still have ‘ammunition’, so they would fight very hard to bid for land,” said Cao, who was attending an event held by China Index Academy, a real estate research agency under Fang holdings Ltd.
“But I estimate many would face financial pressure due to the curbs in the second half.”
China’s real estate investment rose 6.9 percent in 2016 as property sales in China saw the fastest annual growth in seven years.
Additional Reporting by Jenny Su; Editing by Amrutha Gayathri