China

Chinese Real Estate Brokerage E-house Downgrades 1,107 Housing Projects

This article was originally published on July 2, 2014 at 11:23 pm EST

Summary:

  • China’s real estate brokerage firm E-house (EJ) has downgraded 1,107 real estate projects out of a total of 4,038 projects in 21 cities, as reported by Sina.
  • Downgraded projects include large real estate developers such as China Vanke (CH: 000002), Poly Real Estate (CH: 600048) and Greenland Hong Kong Holdings (HK: 0337)

Why It Matters:

  • As a national real estate broker, E-house monitors the sales of 4,038 projects in 21 cities and provides four kinds of grading, namely, “Strong Buy”, “Recommend Buy”, “Cautious Buy” and “Hold”. The grading provides purchase instructions for potential real estate buyers, however, unlike grading stocks, E-house does not provide a “Sell” grading.
  • The percentage of “Strong Buy” decreased to 4.8% from 5.9%; the percentage of “Recommend Buy” decreased to 46.6% from 65.2%; the percentage of “Cautious Buy” increased to 40% from 25%; and “Hold” increased to 8.6% from 3.8%.
  • Senior Manager of E-house, Dandan Yu, said housing prices were expected to decrease further and the company is very likely to further downgrade housing projects.