Shanghai Daily news

China's recent clampdown on the overheating real estate sector has hit property development and building materials businesses, with some already having formed strategic plans to avoid further loss.
Chinese property and construction material stocks have come under heavy selling pressure since Shanghai in March implemented a 5.5 percent capital gains tax on apartments sold within the first year after purchase, analysts said.
Among those hit was Hong Kong-listed Shanghai Forte Land Co whose shares declined 5.9 percent to 2.4 Hong Kong dollars (31 US cents) on Monday from a month earlier.
Shanghai-listed Maanshan Iron & Steel Co saw its shares drop by 13 percent to 3.48 yuan (42 US cents) during the same period.
Other listed companies related to real estate, such as Shanghai Real Estate Ltd, Beijing Capital Land Ltd and Anhui Conch Cement Co, also reported declines in their share price from a month earlier.
"We believe property developers and construction material producers are the geared victims under Beijing's latest crackdown on overheating in the property sector," said Cheuk Wan Fan, an analyst at ABN AMRO Bank NV's Hong Kong Branch.
"We remain cautious about the outlook for producers of cement and structural steel products due to the increased uncertainty for their demand and price outlook on the back of the mortgage tightening measures."
In the latest move toward eliminating speculation in the local real estate market, Shanghai is requiring its property owners to pay off their mortgage debts entirely before being allowed to sell property units as of this week.
"But there are still few signs that the housing prices in Shanghai will decline sharply as the measures the government took so far are mild," said Zhao Hanzhong, senior vice president of Shanghai-listed Gemdale Corp, a Shenzhen-based land developer.
The wise way to offset potential risks from the overheated real estate market in Shanghai is to scatter investment into other developing real estate markets, Zhao said.
For its operations in the Yangtze River Delta region, Gemdale will not only focus on Shanghai, but also on some secondary cities in this region, including Zhenjiang, Taicang, Zhangjiagang and Jiangyin, according to Zhao.
Gemdale's rival Shanghai Forte, entered into a contract to develop a residential project in Wuxi City last month.