Cross-posted from Investing in Chinese stocks.
I was in Wuhan for the May Day holiday, and the number of buildings nearing completion or sitting empty was incredible. In some areas it was development after development after development, literally as far as the eye could see. Sales were down 10% from March in April, and developers were only selling about 50% of properties up for sale.
In Beijing, some home prices plunged by ￥1,000,000 and still no one inquired. This story also quotes the same Mao Daqing from the WSJ article above. He tried to sell an apartment at cost in 2013 and couldn’t find buyers, so he is renting it.
Beijing property market “51” golden weeks spent in silence. “East Third Ring shuangjing Hopson International 137 square meters Sanju, the market price of 7.5 million yuan, now 6 million yuan Jishou.” Housing price plunge more than 100 million directly, still nobody cares.
Beijing second-hand housing has been a decline in sales. “I am also in 2013 to sell a house, 100 square meters of the house, you can not sell.” On the eve of Mao Daqing, vice president of Vanke “May Day” in an internal exchange meeting said, “It is getting increasingly sell can not afford to let me price broker, the broker told me that I sell at cost price, and did not calculate the interest, the outcome is that I do not sell, rent received. “
Prices are starting to come down in Beijing suburbs as well.
New home sales war started
Under the impact of second-hand housing, Yishoufang market differentiation. Orange took the lead from the living Vanke total sales price the market opening, located in Tongzhou impression of Taiwan in East Lake followed. East Asia, Taiwan Lake Impression II Residential market price from the expected 26,000 yuan / square meter from 22,000 yuan adjustment / square meter, and the products expected from the original rough adjustment to fine decoration.
Although Vanke responsible person on several occasions stated Zhuzong Vanke orange than price, is in accordance with the Construction Committee approved rates. “Vanke is evident disguised price cuts, the situation is a good time to raise prices by refined decoration, now just follow the launch of the rough housing situation in the housing market.” Person in charge of a developer to “China Business” reporter.
Also Vanke real estate, located in Tongzhou Taihu COFCO Vanke Park at the end of last year, the price had to rally scheduled in 30000-32000 yuan / square meter, compared to the current price of 26,000 yuan / square meter. “Vanke again becomes rough housing with fine decoration reason.” Developers said above, including Vanke, opened a number of new projects have increased the intensity of the push plate.
Up to now, Beijing supply Built in the year the project has reached 57, the total supply of housing up to 16,179 units, compared to 28 projects in 2013 over the same period of 8197 sets, the rate of increase reached 97%.
Baoding is also seeing a cooling property market, and this is one city that may deserve some speculation since the economy will benefit from government offices being moved from Beijing. Prices jumped 30% or more after the news, but now they are coming down.
According to a local developer, due to the impact of “vice capital” of the good news, is located in Baoding Taipei District’s new real estate at the end of March ushered in a price peak, many real estate prices in half the time up 30% -40%. However, only less than half the time, Baoding property prices and trading volume began a significant decline.
Reporters found that began in late April, most northern city of Baoding real estate prices have a slightly downward. For example, the project is located south of the North Second Ring Park era, the once sought after by many investors. 51 period, within the project sales office empty. In addition, Golden Harvest Yuansheng, Tianwei Green Valley and other projects sales offices were also visited and cold, and the launch of the full amount to buy a house promotions.
“The current performance of Baoding cool the property market, partly because of quality real estate has been sold out, the other is because people tend to be more rational.” Regional manager for a large local real estate company said.
From the story on Baoding, May holiday transactions fell sharply in Beijing:
Beijing property market turnover fell during May
According to the Central Plains real estate statistics show that two days before the holiday, the Beijing property market total turnover of 131 residential units, of which 110 new residential units, 21 sets of second-hand housing, the Beijing property market expected a small holiday period this year will reach 200 units, far below last year 975 units over the same period.
this year, with the spread of price surges, Vanke, gold, etc. A shares a quarterly poor performance of the property market is expected to continue to decline. During May this year, NetEase rough statistics May 1-2 tier cities north of Guangzhou-Shenzhen transaction data, Beijing, Shenzhen and other property transactions has fallen sharply, down over 80%; Shanghai, Guangzhou and other real estate increased markdowns, such as Agile year Foshan king project is half price “diving” for sale.
Consulting Zhang Hongwei, director of research with policy analysis pointed out by the bank credit crunch, the rate of increase slowed first-tier cities, cities slashed prices of individual properties appear counter-attack, means that the current stock of large parts of the city, targeting high-end real estate to turn pressure intensified .
Fifty-one great diving portion of turnover decline over 80%
With the spread of price surges in the Yangtze River Delta early this year, the mainland real estate market is not red red in May. According to Netease data center real estate statistics, dates between May 1-2, Beijing residential sales 106 units, the average transaction price of about 25,100 yuan / square meter;
Shanghai residential sales 427 units, the average transaction price of about 28,100 yuan / square meter; May 1-2 in Guangzhou, Guangzhou Total net signed 302 units, an area 33,303 square meters, average turnover of 13,681 yuan / square meter; Shenzhen market single-handedly Residential turnover of only 21 sets.
NetEase noted that the query publicly available data over the same period in 2013 May 1 data comparison, Beijing, Shenzhen and deal with larger decreases; 2013 “May Day” holiday, Beijing new commodity housing (including affordable housing) 803 sets; while the Shenzhen 2013 dates between May 1-2, Transacted 130 sets in 2014 fell by 83%.
In addition, Guangzhou and Shanghai, the two housing prices increased efforts in sales promotion, for example, according to Shanghai Netease statistics show that in May Shanghai project uses a total of 269 promotions, discounts ring rose 36 than the number plate, the number of items in the sale discount increased significantly, the high-end part of the project is given a discount of around 50-100 million.
In the Guangzhou market, from the beginning of February this year, such as Agile, Agile and other real estate price opened the curtain, Agile’s six major tourism real estate projects, both across the board 7.8% discount.
NetEase noted that not only hard to find a good start in May this year, in April tier cities turnover situation has underperformed. NetEase property data center to the latest statistics, in April 2014 the city of Guangzhou 5195 sets of first-hand residential net signed, fell 7.5% in April last year, the chain fell 16.7 percent in March then.
April 2014 2649 Shenzhen residential sales units, down 32%, the average price of 23,931 yuan square meters, the performance gains.
According to the chain of home real estate market research statistics, Beijing April new commodity housing (including affordable housing) net signed volume of 6091 units, reduction of 16.4% over the same period in March.
Zhang Hongwei said the credit crunch is already an established fact that has affected the “gold, three silver and four” entire market turnover, poor performance. Housing prices in the first half of the first half to be “cheap to run volume, cash is king.”
Housing Enterprise Performance Pressure king Foshan Agile project sold at half
Now, with the stepping up of bank credit, market sentiment is strong, housing prices to melt under pressure. Recently the National Bureau of Statistics data show that a quarter of the national real estate sales 201,110,000 square meters, down 3.8%, of which residential sales fell 5.7%. National real estate sales 1.3263 trillion yuan, down 5.2%, with residential sales fell 7.7%.
The result has been announced a quarterly Vanke, gold and many other A-share net profit from January to March this year, real estate companies, such as a downward trend. 2014 first-quarter report showed China Vanke disclose achieve revenues 9.497 billion yuan in the first quarter, down 32.16%; net profit of 1.529 billion yuan, down 5.23 percent. Gold a quarterly net profit fell 70 percent and more.
As of April 29, the disclosure of a quarterly or results forecast in Shanghai and Shenzhen 103 listed room rate, driven by the decline in gross margin and other factors, there are 55 results appear profits or losses fell.
NetEase noted Agile in 2010 to 525 million won Foshan, a commercial and residential land, the floor price of up to 7,121 yuan / square meter, becoming the regional unit “king.” The company currently foreign sales data show that 9 prefix to price foreign sales, has more news shows part of the special units only 8000 yuan / square meter, compared to last year’s highest-priced almost folded in half.
It is reported that during the 2013 to push the goods, the real estate prices up to 15,000 yuan / square meter, the basic unit in the last floating price range. Then there is the real estate profession, said, referring to land and other costs, the price of at least 13,000 yuan / square meter is enough guarantee. During the Spring Festival this year in South Area Agile Property had opened promotions, is the industry refers to its 70 billion sales target under pressure.
Chain of home real estate market research Zhang Xu believes that since March, has some cheap real estate market, waiting to see if the demand does not significantly alleviate the short-term, such as Beijing this residential market will enter the price adjustment phase, the “price change” sales mode or play.
Finally, this opinion peace, calling on the government to not bailout the market because the turning point will come sooner or later: 评论称楼市拐点迟早会来 政府救市不宜再举
Why can not the government bailout? As experts put it, “real estate as a whole, over the last so many years has been eating special treatment, like the youngest child at home is always more care and now the market is returning to the original rules of the market in this case, the special treatment should no longer eat up. “In addition, the real estate market” virtual fire “lasted for many years, a lot of flowers to cover the surface of the deep-seated problems, regardless of the local government land dependent on finance, or China’s economic transformation and upgrading difficult, In fact, clues can be gleaned from the real estate market in full swing.
Even self-interest from the local government, although the current bailout may play efficiency to ease the financial pressure of a temporary, but eventually betrayed the poor of the land, land finance destined not lasting, equal to the current bailout more harm than good.
Whether you welcome it or not, the property market turning point will come sooner or later. While the Chinese economy and society, it is no doubt better than the early to late. Therefore can not give this false fire exuberant real estate market and its efforts to pass any point role of information likely to cause his fantasy, and in the process end land finance and let the market play a leading role in the government which should be played, it should be clear.
