Haining, Zhejiang Is Building 8 Years of Housing Supply; Real Estate Executive Says Housing Market Will Crash

The string of bad housing news out of Zhejiang province keeps on going. This story is a paper napkin story: the situation is so bad that an executive can calculate disaster by adding up all the area under construction and dividing it by the population.

Selected portions of this Google Translated article follows. (cleaned up in parts to convey meaning)

浙江海宁1.6万套库存压顶消化需8年 房企称就要崩盘
Similar to the recent housing crisis broke in Yuyao, the same as the Chinese economy Haining county, in 2013 Haining ranked No. 21 in China's top 100 economies by county.

21st Century Network in Haining survey found that there are a number of local real estate began to cut prices, individual housing prices due to funding strand breaks and on the verge of bankruptcy.

......In March, for example, in March 2013, Haining City, sales of residential units for 778 units, of which 406 sets of urban residential, urban sales price reached 12,000 yuan / square meter, and in March 2014 the city's sale of 330 units of housing, urban 174 residential units, urban sales price 10,021 yuan / square meter.

......"Haining property market will collapse," and in an interview with 21st Century Network, a large room Haining local real estate executive directly flashed his views.

He demonstrated a 21st Century Network, "Haining real estate under construction and for sale" table, diagrams include 29 properties, the total area of ​​more than 6,000,000 square meters, more than 40,000 homes.

"This chart is my design, friends and engage in real estate companies, but also missed some real estate, according to our latest statistics, Haining real estate for sale and under construction in the area reached 9.5 million square meters. 30 square meters per person, that satisfies 300,000 people, and Haining total population (including non-residents) was 680,000," this executives said.
By the executive's math, that is 40% of the population's housing demand for sale or under construction.

21st Century Netcom survey of real estate listed on the chart found a lot more than just the actual data. For example the first developement on the list, 王庭世, area listed as 1.2 million cubic meters, but in fact the project planning for the 1.4 million square meters.

......According to the Bureau of Statistics data released Haining, Haining full year 2013, housing construction area of ​​14,826,300 square meters.

However, this figure is much higher than the houses Haining transparent online data.

According to Haining transparent network, as of April 14, 2014, Haining city houses sold 16,129 units, salable area 1,970,200 m2. But even this set of data, Haining property inventory is still high, far more than other counties belong Jiaxing even comparable with some of the prefecture-level city in Zhejiang.
If the 14.8 mil number is right, by the executive's math they are building enough housing to satisfy 70% of the total population.

According transparent network data, as of April 14, Tongxiang city has 9615 homes available for sale, salable area 1,248,300 square meters, Haining, Tongxiang and adjacent to the total economy less, both of 2013 GDP , respectively 63.365 billion yuan and 57.347 billion yuan. Comparative statistics show that in 2013 prefecture-level city in Jinhua City, salable area of 2,099,700 square meters.

......According to March of this year sales of 778 units, Haining only digest this 16,129 houses will need 21 months, should the real estate sector in accordance with the 9.5 million square meter data to digest these stocks will need more than 8 years.
I think they made a mistake. From the article, the 778 figure is for 2013, for 2014 they reported 330 units sold. So those figures are double if going off of this month's low sales figure, which makes for a better headline, but using the better sales number actually drives the point home better since that was a normal month for sales.

For the "crash" on local people, the president of the Asia-Pacific Urban Real Estate Association Xie Yifeng network for the 21st century, "said to conclude the entire city will collapse is premature."

In his opinion, the same high inventory, but the situation there are different situations Haining compared with these Midwestern cities like Shenmu (see NYT on Shenmu last August: Easy Credit Dries Up, Choking Growth in China, Haining, Yuyao more comprehensive economic strength, the ability to resist risks it stronger. "However, individual housing prices collapse is inevitable." He added.

......The above real estate sector told 21st Century Network, a company called Rucker Haining Real Estate Development Co. (hereinafter referred to as Rucker estate) companies actually bankrupt.

According to its introduction, Rucker real estate is one of the larger local businesses, industries involved in real estate, hotels, restaurants, culture and the arts, industrial socks, etc., over 1 billion yuan in capital, but now due to funding strand breaks, Rucker's estate Multiple projects have failed to materialize.

1 comment:

  1. Excellent blog, wish I had stumbled across it earlier. Keep up the good work !