Bloomberg News

China Vanke Cut New Home Prices by an Average 10% Since October

September 18, 2008

China Vanke Co. (000002), the mainland's largest publicly traded builder, has been selling new residential units at an average discount of 10 percent for the past 11 months to boost sales, a company executive said.

``The effect on sales from price cut were very positive,'' Executive Director Shirley Xiao told reporters at a briefing in Hong Kong today. ``It is of course impossible for us to repeat last year's transaction volume, but the real estate market is not as bad as it looks like.''

Property demand China is dropping as a result of government measures to curb price growth, and on concerns the world's fourth-biggest economy is slowing. Home prices in China climbed at the slowest pace in 18 months in August, the National Development and Reform Commission said yesterday.

Vanke last week said sales in August fell 35 percent from a year earlier, the third monthly drop. Sales dropped 15 percent in July and 23 percent in June. The Shenzhen-listed developer has fulfilled 45 percent of its sales target set at the beginning of the year.

The company last year sold 52.4 billion yuan ($7.7 billion) of real estate, and sold 31.3 billion yuan worth of properties in the first eight months of this year.

Vanke's shares have plunged 71 percent this year, compared with a 64 decline in the benchmark CSI 300 Index. The stock advanced 0.2 percent today to close at 5.17 yuan, ending a two- day slide.

Other developers such as Poly Real Estate Group Co. have reported falling sales, and Greentown China Holdings Ltd. said last week the property market is in a ``prolonged phase of correction.''

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Tom Kohn at tkohn@bloomberg.net


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