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China Housing and Land Goes Private as Property Market Slumps

The slump is hitting even tier I cities such as Beijing, where total housing turnover in the first half fell 38% from the same period 2013 to about $12 billion, the lowest in at least six years, according to Centaline Property Research.

In hopes of salvaging their local property markets, dozens of cities around the country have relaxed restrictions on home ownership, pricing and credit that were imposed several years ago to tame speculation. But state banks reportedly have been ignoring requests for easier mortgage lending.

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On the other hand, the slump has so far had a negligible affect on the mainland's biggest developers such as China Vanke, which is preparing to list in Hong Kong, and companies focusing on government-funded slum redevelopments such as Nasdaq-listed China HGS Real Estate  (HGSH) .

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.


TheStreet Ratings team rates CHINA HOUSING & LAND DEV INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINA HOUSING & LAND DEV INC (CHLN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow."

You can view the full analysis from the report here: CHLN Ratings Report

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