CapitaLand’s condos expected to sell like pancakes on back of aggressive Chinese easing

Q1 China sales volume surged 68%.

CapitaLand’s residential units in the mainland are expected to sell robustly as the Chinese government’s policy easing gains steam.

UOB Kay Hian analysts Vikrant Pandey and Derek Chang noted that mortgage availability will improve following the People’s Bank of China (PBOC) move to cut the benchmark one-year interest rate in November 2014 and February 2015.

CapitaLand will also benefit from the Chinese government’s lowering of minimum down payment levels for second purchases from the current 60% to 30% or 40% , along with the decision to relax home purchase restrictions in second and third tier cities.

In the first quarter, CapitaLand sold 1,306 units in China, an increase of 68% year-on-year. These units were valued at $474m (RMB 2.2b).

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