In the face of rising liquidity pressures, real estateers seem a little out of place. On 23 october, a building in the gadi district of shanghai was opened up by a substantial reduction in the price of the house, causing displeasure on the part of the owner. Some of the owners claimed that hundreds of thousands of dollars had been lost as a result of the price reduction. Last week, the city of long lake, the greenfield autumn shaft, and the hee-shie-shang of the sea city of the sea, among others, saw an overall price reduction of between 20 and 40 per cent. This happened not only in shanghai, but in beijing and shenzhen。
Beijing's second-hand chamber has fallen by $22,000
Last week, the city of dragon lake, the green land autumn shaft, and the hee-shie of the sea of china sea were all-rounded and reduced by 20 to 40 per cent. “the market price decline in the building has exceeded market expectations, both at a speed and in depth.” according to china house trust group analyst xue jianh。
In the wake of the fall of the housing giants, shanghai prices continued last week. According to data from the china housing information group, last week (17-23 october) the commercial residential area in shanghai fell again by 100,000 square metres, a 19 per cent decrease in the ring. The average transaction price was $21247 per square metre, a 5 per cent decrease in the ring ratio。
In recent days, the director of rosestone consulting, a famous “singing-out” economist, xie quixin, has said, in an alarming way, “the 50 per cent decline in home prices in the future is normal”. He stressed that, once monetary policy continued to tighten, a large number of developers would face collapse。
The authorities' data also seem to confirm that the above-mentioned predictions of cheyenne are gradually becoming a reality. On 18 september, data published by the national statistical office showed that the august round-table prices of 70 large and medium-sized cities had fallen by 16 and the august round-table prices by 30, an increase of 15 in the number of cities with declining ring-to-coup prices and flat-to-share prices, compared with july, and that none of the cities with rising ring-to-coup prices had increased by more than 0. 4 per cent, or by 8 of the cities with declining prices in july。
Although the realtor continues to shout, "the more limited it is, the more it is to buy." however, the price of the house is showing a real decline. Chinese estate
Brief update on developments
The chairman of the board of directors even stated in a recent forum that “many people say that the real estate bubble in china is now deep, so deep, why is it that the center is working so hard on the left, right and right, and so on?”
Yesterday, in an interview with an expert on the price of the house, the expert, who did not want to reveal his name, said: “the decline in the price of the house is certain and will not stop if it does. There's no point in a realtor asking for it."
The results of china's original property survey show that the average value of the newly opened building in hangzhou is currently between 10 and 20 per cent. The average exchange price for the main urban area fell from $21,000 per square metre in august to $17,000 per square metre, a decrease of almost 20 per cent。
In addition, new openings in the cities of chengdu, nanjing and tianjin have begun to fall. The majority of these reductions were within 5-10 per cent, and the range of reductions has been extended to the main urban and suburban areas; the average price of new start-up buildings in nanjing has been reduced by about 10 per cent and the price of housing in the peri-urban areas has been reduced considerably; and the average price of new houses in tianjin has been reduced by between 5 and 15 per cent。
The decline in house prices in the suburbs of beijing is also evident. The price reductions for several projects such as east rose, pearl river and maple in china province in beijing were considerable. The price reductions for these individual items are generally above 20 per cent compared to the maximum price, and some have already exceeded 40 per cent。
According to industry sources, the price reduction pressure for second-hand houses in beijing is increasing. In mid-october, the average sale price per square metre of used houses in beijing fell again by $22,000, almost 14 months old。
Recently, the largest private equity company in the world, blackstone, withdrew for the first time from real estate investment in china, and a pressure test for chinese real estate developers, published on the 27th of the standard, shows that many developers are expected to lose 10 per cent in the next 6 to 12 months in order to guarantee liquidity。
Sheng chong predicted a 50 per cent decline in domestic housing prices in the future. “it should be noted that there is a strange phenomenon that the global real estate market is falling and that only china's real estate market is still in the cattle market. In fact, a 50 per cent decline in domestic housing prices is normal in the future.”。
The financial chain is tight, and it's going to cry for a while
For developers, fighting the onset of winter depends on the financial chain。
However, the data show that in the semi-annual reports disclosed by 106 listed companies ' real estate enterprises, the overall asset-liability ratio of listed companies reached 72 per cent in the first half of the year and the total debt exceeded rmb 1. 09 trillion, an increase of 41 per cent over the previous year. Of these, the most lethal current liabilities already accounted for 70. 6 per cent of total liabilities, an increase of 54 per cent over the same period。
The five real estate enterprises that were first reported as having cash flows totalling $6. 409 billion are listed among the top 10 companies with the worst operating cash flows, namely, the littoral group, the town of gakay and the rhine building. Of these, the coastal river group achieved net profits of only $150 million in the first half of the year, a 40. 16 per cent decrease over the same period, an operating cash flow of $2812 million and a higher debt ratio of 80. 78 per cent. Of the 10 major housing enterprises, the debt ratio was over 70 per cent, of which vanco and long lake had reached 78 per cent。
In a report released on 22 november 2010, shen jianguang, an asian economist in hong kong with suhko securities, wrote that since november 2010, bank loans to chinese real estate providers have been largely discontinued. “the rising liquidity pressure will force real estate operators to lower prices in order to increase sales and bring about sustainable cash flows.”
The vice-president of china’s economic reform reform programme has stated publicly that it is good for developers to cry for a while, because it shows that china’s real estate has begun to land softly. Further, he pointed out that china's macroeconomic policy had reached a “foam-proof state” and could not be reversed halfway, and that the rebound in housing prices that had occurred in previous years after the decline in regulation was unlikely to occur again。
In addition to the financial chain, the decline in the land supply chain has been a major factor in the decline in real estate market prices。
Data from the beijing city land processing and repository centre show that, to date, 87. 4 hectares of residential land had been released from beijing in january-may by means of posters, less than 10 per cent of the planned annual supply (1225 hectares). Based on the declining trend in turnover, it has been argued that the real estate market prices in china will fall by 10 per cent。
Insolvency, mergers and acquisitions in the real estate sector will become normal
Standardized corporate rating directors are expected to decline domestic housing prices by 10 per cent next year, while maintaining a “negative” outlook for china's real estate sector. “the financial pressure on developers has continued to rise since june, she states. We believe that their sales will remain very uncertain for the next six to 12 months. In addition, the overall liability of the real estate sector has risen rapidly。
The deputy director of the financial research institute of the centre for development studies of the state council, bashir, stated that insolvency, mergers and acquisitions of real estate would become the norm in the medium to long term。
In a newspaper article, he reported that a significant restructuring of the real estate sector in china was currently taking place, and that the modalities of the adjustment and the strategy of the developers might be to reduce prices in the short term by reference to the balance of gains and losses determined by the cost of financing and the rate of return on the project; to divide and integrate the medium- and long-term industries; to normalize the bankruptcy, mergers and acquisitions of the real estate sector; and to diversify and activate real estate finance activities。
The chinese chamber of commerce and industry, the managing director of the national union of real estate managers, and a well-known commentator of real estate, dai hin ming, predicted that china's housing prices would not meet the “soft landing” expectations in the short term, a process that would take about three years。
Journalist lu tianling, intern, fang yan
