China Home Sales Plunge in July, as Mortgage Revolt Deters Buyers
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China Home Sales Plunge in July, as Mortgage Revolt Deters Buyers

Sales fell on the year and from the previous month, ending a budding recovery.

By Cao Li
Wed, Aug 3, 2022 10:46amGrey Clock 3 min

A nascent two-month recovery in China’s home sales ended in July, as a widespread mortgage revolt over concerns that ailing property developers wouldn’t be able to deliver still-unfinished apartments weighed on demand.

Sales at the country’s top 100 property developers fell 39.7% in July from the same period last year to the equivalent of $77.6 billion, or 523.14 billion yuan, according to data released Sunday by CRIC, a Chinese real-estate data provider.

July sales were down 28.6% from June, ending a two-month recovery in month-to-month sales growth. Apartment sales showed increases in May and June from the previous months, as activity picked up following Covid lockdowns in Shanghai and other Chinese cities earlier this year.

China’s private-sector property developers went on a yearslong, debt-fueled building boom, selling homes before they were built, until a funding crisis that began last year led to defaults and stalled projects. Buyers who typically sank large down payments into those homes have been venting their frustrations all summer.

China’s home sales often experience a lull in July, because developers rush to book sales in June to meet first-half targets. But analysts said the main drag on activity this time has been the mortgage revolt and its impact on would-be buyers’ confidence.

The revolt started at the end of June at an Evergrande project in Jingdezhen, in central China’s Jiangxi province, where frustrated home buyers threatened to renege on mortgages on unfinished properties. Hundreds of buyers from roughly 320 projects across the country had followed suit as of July 29, according to a tally of statements from homeowners who said they will stop paying their mortgages circulating on GitHub, a Microsoft Corp.-owned coding-collaboration site.

Home buyers—some waving signs saying “Construction stops and mortgage stops!”—say the threat to halt payments is the only way to get their voices heard as projects stall and delivery times drag out. A broadly slowing economy that is biting into employment and incomes is adding to the pressure. Some buyers say they are increasingly unwilling to keep paying for a home they aren’t sure they will ever receive.

Week-over-week data put together earlier by CRIC to study the impact of the mortgage revolt had signalled the July decline. In 30 cities CRIC determined to have been seriously affected by the revolt, new home sales dropped by 12% in the week ended July 10 from the week before, then fell 41% in the week ended July 17.

More home buyers are choosing second-hand homes or new ones built by state-owned developers, which are typically in a stronger financial position.

Pressure on the government is building, but hopes for a large real-estate rescue package from Beijing remain unrealized. The Politburo, China’s top policy-making body, made clear recently that local governments are ultimately responsible for fixing the property woes in their markets.

Budget-strapped local authorities have strained to boost property demand, resorting to increasingly creative measures. Dozens of cities have lowered down payments and interest rates. Some are offering outright cash subsidies. Others have announced relief funds for cash-strapped developers or plans to take over troubled projects.

“But the sector won’t stabilize if developers’ liquidity crunch is not relieved,” said Song Hongwei, a research director of Tongce Research Institute, which tracks and analyzes China’s real-estate market.

On Friday, troubled property developer China Evergrande Group sketched out the contours of a plan to restructure its billions of dollars in debt and said its contracted apartment sales in the first six months of the year had fallen about 97% from the same period a year earlier.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: July 31, 2022



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Property of the Week: 8-10 Howard St, Kew

Home to Sir Robert Menzies and Dame Pattie, this grand Melbourne estate is a piece of Australian political history.

By Kirsten Craze
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It may be a well-worn cliche, but if these walls could talk there would be plenty of state secrets to share. The landmark residence at 8-10 Howard St, Kew was once the private residence of Sir Robert Menzies and Dame Pattie between 1929 and 1949, during the Prime Minster’s first term in the top job. He later held the role again from 1949 to 1966, making him Australia’s longest serving Prime Minister.

Historical land records indicate that the Howard St property was sold to Leonard Clinton Shaw, brother-in-law of Pattie Menzies. Robert and Patti then moved to live into The Lodge in Canberra.

The stately arts and crafts era home was built in the 1910s and has reportedly played host to a long list of dignitaries and VIP guests. As rumour has it, the drawing room of the Kew property is where Menzies crafted his iconic speeches and held many clandestine meetings.

Today the imposing five-bedroom residence, which sits on a vast 1874sq m land parcel in the coveted Studley Park precinct, has come to market through Marshall White agents James Tostevin and Chris Barrett with a price guide of $8.3 million to $8.9 million.

According to CoreLogic, the property last sold in 2018 for $7.75 million.

Beyond the expansive parklike grounds that to pay homage to celebrated Australian landscaper Edna Walling, the two-storey house is packed with meticulously maintained period features.

Showcasing the best of arts and crafts design influences, the home has a charming tuck-point brick façade, a tessellated tile veranda, coloured leadlight glass windows, dark stained wood panelling inside, as well as high decorative ceilings and cornices.

The large foyer divides the lower level into two distinct zones; big formal rooms and more casual family-friendly spaces. Built for entertaining on a grand scale, both the lounge and dining rooms rooms have original fireplaces and open out to either the undercover veranda or enclosed sunroom.

Also on the ground level, a spacious family room with yet another fireplace connects to an everyday meals area, and the contemporary kitchen comes complete with granite surfaces, a Paul Bocuse stove, an integrated Miele dishwasher, a walk-in pantry and wine cellar. A home office, or potential guest bedroom, plus a large laundry and two powder rooms round out the lower level floor plan.

Up via a majestic timber staircase, four big bedrooms have fireplaces and built-in wardrobes, while the primary suite is home to a palatial ensuite and dressing room. This accommodation level also houses two family bathrooms and a rear balcony that overlooks the grounds.

Outdoors there are multiple lifestyle features including a north/south tennis court with lighting, a unique rounds swimming pool and all-weather terraces.

Other features include an alarm, hydronic heating, a 60,000L underground tank, a garden shed, a remote double garage and additional off-street parking.

Located on the old Oakland Estate, the Menzies’ former home is close to popular eateries, Xavier College, St Vincents Private Hospital and golf courses.

 

Expressions of interest close on March 11, at 5pm for 8-10 Howard St, Kew. The home is listed with a price guide of $8.3 million to $8.9 million through agents James Tostevin and Chris Barrett of Marshall White.

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This stylish family home combines a classic palette and finishes with a flexible floorplan

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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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