Investing.com – China’s property shares slumped 3% on average on Wednesday, as reports showed that Guangdong Province is set to gradually abolish the pre-sale system for commercial properties.
Country Garden Holdings Company Ltd (HK:2007) tumbled over 5%, while China Vanke Co Ltd (HK:2202) also dropped 3%. Sunac China Holdings Ltd (HK:1918), Guangzhou R&F Properties-H (HK:2777) and Evergrande Real Estate Group Ltd (HK:3333) fell as much as 4%.
Reports underlined concerns related to over-investment under the current system, while the new policy aims to attract more developers. Even after the Guangdong property authorities clarified that the document is for consultation instead of implementation, property shares tumbled.
Experts from China Merchants Securities Co. Ltd said that the policy might be implemented gradually in the coming 3 to 5 years in trial cities and be only limited to new land. They expected the changes to have limited influence on real estate shares in the short-term.