Property prices in first-tier mainland cities will rise 10 to 15 percent this year, following an 18 percent surge in 2015, amid supportive measures from the government, DBS Vickers (Hong Kong) Ltd. said.
Meanwhile, home prices in second and third-tier cities are expected to rise 5 percent, after a slide of 6 percent last year, research head Carol Wu Shu-yen told the Hong Kong Economic Journal.
However, shares of property counters will continue to be weighed by the depreciating renminbi and falling gross profit margins, Wu said.
Improving home prices will only be reflected on the stocks once the listed firms announce better sales in March, she said.
The negative impact of the declining yuan on the sector will not fade out anytime soon.
Wu is upbeat on China Overseas Land and Investment Ltd. (00688.HK), China Resources Land Ltd. (01109.HK), CIFI Holdings (Group) Co. Ltd. (00884.HK) and other developers tapping opportunities in the redevelopment of rural areas.
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