From the attitudes of all parties, we can see the changes in the future property market. (Image source: Govan/Adobe Stock)
[See China News on June 18, 2021](See a comprehensive report by Chinese reporter Li Zhengxin) China’s 70 cities in MayHouse priceOut of the announcement, 62 cities rose month-on-month. but,Property marketMore and more differentiation, some urban houses “cabbage price”, manyreal estateThe developer divested its real estate business and over 100 went bankrupt during the year.
On June 17, the National Bureau of Statistics of China announced the sales price data of commercial housing in 70 large and medium-sized cities in May. The sales prices of newly-built commercial residential buildings in 4 first-tier cities increased by 0.7% month-on-month and 6.0% year-on-year. The sales price of second-hand housing in first-tier cities increased by 0.6% month-on-month. Among them, Beijing, Shanghai and Guangzhou respectively rose 1.1%, 0.7% and 0.9% month-on-month; Shenzhen changed from flat last month to a decline of 0.1%. The sales price of second-hand housing in first-tier cities increased by 10.8% year-on-year.
In May, the sales prices of newly-built commercial residential buildings in 31 second-tier cities and 35 third-tier cities increased by 0.6% and 0.4% month-on-month, respectively; the sales prices of second-hand residential buildings rose by 0.4% and 0.2% month-on-month, respectively.
Analysts said that the lack of land supply combined with factors such as the pre-sale price limit of new homes has boosted the popularity of new home markets in some key cities. Centaline Real Estate analyst Zhang Dawei said that the month-on-month increase in the sales price of newly-built commercial residential buildings in all tier cities continued to be flat; the month-on-month increase in second-hand residential properties slowed down significantly, and the second-hand housing market gradually stalled under over-regulation.
Li Yujia, a senior economist at the Guangdong Housing Policy Research Center, believes that developers will increase their sales promotion efforts. However, due to the high land prices in the early period, the price limit in various places is limited to the increase rate, not the price reduction.
The interest of public opinion in China’s property market has never diminished. Some Chinese people recently went to Shuangyashan City, Heilongjiang Province to buy a house. A 65-square-meter new house was sold for only 11,000 yuan. The tragic housing price made buyers feel mixed.
[Guess how tragic housing prices in Heilongjiang are]
In China, property prices are always a confusing topic. The China Bureau of Statistics released on June 17 the changes in the sales prices of commercial residential buildings in 70 large and medium-sized cities, showing that in May 2021, the sales price index of newly built commercial residential buildings in 62 cities increased month-on-month.
However, some netizens have recently been to Shuangya City in Heilongjiang near the Sino-Russian border. New houses of 65 square meters are only for sale…Online video#Property bubble pic.twitter.com/4Q9QqCFEfC
— Radio Free Asia (@RFA_Chinese) June 17, 2021
The quality of Chinese buildings is also worrying. 11 years ago, Qiu Baoxing, the then deputy minister of the Ministry of Housing and Urban-Rural Development of China, made a shocking statement and caused a storm of public opinion. The words are still in my ears, “The average lifespan of Chinese buildings can only last for 25 to 30 years.”
In contrast, the average life span of British buildings reached 132 years, while that of the United States was 74 years. Compared with Chinese buildings, the life expectancy is still too short. For example, the SEG Building, which has shaken many times in Shenzhen, is only 20 years old.
The attitude of real estate developers can also be seen in the future changes in the property market. Real estate developers are spinning off their real estate business.
On June 16, Blackstone Group issued a comprehensive takeover offer to SOHO China. After the transaction is completed, the shareholding ratio of Pan Shiyi and his wife will be reduced from 63.93% to about 9%, and SOHO China’s seven-year asset-selling road has come to an end.
On June 15, Sinopec just transferred 99.8% of its shares in Puyang New Century Real Estate Company.
On June 12, Xiamen International Trade Corporation transferred 100% of its equity in China International Trade Real Estate and 51% of its equity in China International Trade Development to China International Trade Holdings. Previously, China World Trade Center and China World Trade Development Development Co., Ltd. have always been the main real estate management companies of Xiamen International Trade Center.
The real estate industry has entered a downward cycle, and the intensive regulation has put pressure on the sales of real estate companies, making it more difficult to withdraw funds. After the financing policy is tightened, there is no more room for manipulation by leveraging the market scale with financial leverage. Therefore, transferring assets and divesting businesses have become the wisest choice for real estate developers who are struggling to survive in the cracks.
Data show that from January 1 to June 18, 2021, there were 358 mergers and acquisitions in the real estate industry, an average of more than two per day. Profits were squeezed, and many companies fell. Real estate companies of a certain scale such as Fusheng Group, Tahoe Group, Blu-ray Development, etc. have all encountered liquidity crisis and had to transfer assets to survive. More SMEs silently submit bankruptcy documents. On the court announcement website, as of June 18 this year, about 136 real estate companies have issued bankruptcy-related documents.
The official attitude may also indicate that the property market will change.
The “China Real Estate News”, headed by the Ministry of Housing and Urban-Rural Development of China, recently published a report entitled “It’s time for real estate speculators to give up their illusions.” In a sense, from cracking down on business loans to anti-money laundering, to restrictions on bridge loans. In fact, the current round of property market regulation has actually entered a stage of in-depth gaming and landing; it can be foreseen that the activity of the property market will be suppressed to a certain extent in the short term, and housing price growth will inevitably enter a low-speed, shock adjustment cycle.
Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said at the Lujiazui Forum in Shanghai, “Those who speculate on foreign exchange, gold and other commodity futures will hardly have the opportunity to make a fortune, just as those who bet that house prices will never fall will eventually pay a heavy price.”
Editor in charge: Xin He Source: Look at China
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