beyondbrics

It’s been another miserable day for China property bulls. Stocks in listed developers took another dive, while turnover data showed a rapid fall over the last week.

Now construction machinery executives are getting gloomy too.

The boss of Zoomlion – China’s second largest maker of cranes and construction equipment, gave Bloomberg a gloomy assessment of the months ahead:

“Demand for construction machinery has shrunk drastically and growth will no doubt continue to slow next year.”

Zoomlion has been hit by a double whammy – the emergency brake put on the high-speed railway build out, and falling demand from housing developers. Aas teh chart above shows, the company’s shares in Hong Kong tanked 7 per cent on Thursday.

Developers didn’t fare much better. China Resources Land fell 5 per cent, China Vanke dropped 4.3 per cent. Data due out tomorrow is expected show a continued drop in house prices across the country.

For companies in the sector, the hope was that affordable housing construction would pick up the slack. But as the FT reported earlier this week, a third of the projects officially underway are little more than holes in the ground.

The big question now is how long it’ll take before the government steps in, loosens policy, and gets the market humming (or frothing?) again.

But for some, whatever they do will come too late. The China Daily reports that nearly 500 real estate agencies in Beijing have given up the ghost, and not renewed their licences.

Related reading:
China misses housing construction target, FT
Chinese property buyers get BMW thrown in, FT
Chinese property boom starts to wobble, FT
More trouble for China property, beyondbrics