Property developers reportedly sold 56 billion yuan (.6 billion) of assets in November, moves analysts attribute to pressure from increased regulation of the housing market and developers optimizing their asset structure.
A total of 11 domestic housing enterprises, including Shenzhen-based China Merchants Shekou Holdings, Overseas Chinese Town (OCT) Group and AVIC Real Estate, sold assets worth 56 billion yuan in November alone, Shanghai Securities News reported on Wednesday. Among the 11, nine are State-owned enterprises (SOEs).
State-owned OCT Group sold three projects located in Beijing, Southwest China's Chongqing as well as Shenzhen in South China's Guangdong Province last month, valued at a total of about 8 billion yuan, according to the report.
Analysts said that tight regulation of the domestic housing market has put pressure on real estate companies, some of which are taking the opportunity to upgrade the structure of their assets and investment by ridding themselves of nonperforming assets.
"The sales are mostly related to ongoing SOEs reform," Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Wednesday.
Yan said that the sell-off will improve the competitiveness of the housing market and the trend will most likely continue through 2018.
Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, agreed, saying that SOEs are seeking safety in the overheated property market by selling off some non-core projects, entirely in line with the purpose of increased regulation.
"Housing policies, such as restrictions on purchases and mortgages, will continue for some time," Hui told the Global Times on Wednesday.