GUANGZHOU: Most Guangzhou-based property companies with projects located in Sichuan face a slowdown this year as a result of the devastating May 12 earthquake, industry experts say.

Liu Jianfeng, an analyst with the MyTopHome Real Estate Consultation Co, said: "The first two quarters were a golden period for property developers to promote their projects. But now, they have to suspend promotional activities due to wide concerns over the earthquake".

Many Guangdong-based property companies have businesses in the quake-devastated Sichuan province, and they now have to adjust their strategies to cope with mounting pressure in the aftermath. AFP

Liu said the suspension of those activities will undoubtedly affect developers' bottom lines.

In this southern mainland city, a number of leading property developers have postponed their sales plans. Neoglory Group, for example, has suspended sales in the past two weeks for its villa project in the booming Panyu district.

A sales manager with the company, surnamed Huang, said: "People are showing little interest in buying houses, since most of them are working to rebuild the quake area".

Zhao Zhuowen, president of Guangzhou TCZY Real Estate Investment Consultant Inc, said: "It is necessary for real estate companies to adjust their plans after the quake. Otherwise, they will encounter growing pressure later this year".

Zhao estimated that nearly 90 percent of the Guangzhou-based property companies won't realize their sales targets this year.

"You have to realize that almost all of the top-10 developers have projects in Sichuan province," Zhao said. "And they were told to stop construction work after the quake."

Furthermore, developers may be forced to reduce property prices later this year to entice buyers, meaning less revenue for the company.

Wait-to-see attitude

"At this time, people are showing a wait-and-see attitude for the property market," Zhao said. "If developers don't reduce their prices, there will be fewer buyers."

A recent online survey by Soufang.com showed that just 6.5 percent of Guangzhou residents plan to buy new homes this year.

Meanwhile, nearly 40 percent of those polled expect property prices to further drop this year.

But some companies such as Poly Real Estate Group say the quake will have little impact on their overall performance this year.

Chen Xiaojing, Poly Real's public relations manager, said that the Guangzhou-based property developer currently has more than 80 projects under construction throughout the country. Some of which are located in Chongqing and Chengdu in Southwest China. In Chongqing, the company has two projects for sale and one under construction.

"Although construction work has been suspended for safety evaluations at this time in Chongqing and Chengdu, we will speed up construction in other areas," Chen said.

(HK Edition 06/05/2008 page2)