Hangzhou Developers Beg For Bailout; The Kuwait of the East Goes Bust

多楼盘频繁降价引发崩盘说 杭州政府救市“密谋”
Hangzhou multiple real estate frequent price cuts, Zhejiang Hangzhou and even sparked concerns about the property market. "If the government does not take measures, Hangzhou property market crash will occur." Kaiyuan Property (Xiaoshan area) Marketing Director Luo Chengwu early April on the " China Business "reporter said.

......March 20, New Century New Century Real Estate's Property county announced price cuts, price cuts of between 10% to 20%. Prior to this, Hangzhou has launched a number of real estate capital return through price cuts.

......The effect of price cuts did not bring overdue. "Century County launched 170 sets of special rooms, one week a turnover of less than 50%." Luocheng Wu said that the price almost reached the floor surrounding real estate prices are still not tempted to buyers.
Price cuts and still no buyers. Panic is setting in.

Price a huge change from supply and demand. Data show that the first quarter of 2014, the main city of Hangzhou real estate transaction sets 5276 sets record for nearly three years over the same period Transacted low, less than 50 percent of last year.

Stock exacerbated sentiment buyers. March 26, under the Housing Authority of Hangzhou transparent network data show that over the same period, the number of residential Hangzhou will be sold from 11.3 million units adjusted to 74,700 units. This is local people refer to as "that inventory." According to Zhang Huifang introduced in the hot property market in 2013, Hangzhou year sales of residential units of less than 80,000.
The developers have cut their sales plans from 113,000 homes this year down to 74,700 homes.

Zhang Huifang explained, in 2012 the average housing development cycle of 21 months, in 2013, housing development cycle requires only 18 months. "Future development of enterprises are bearish on prices, according to preliminary estimates, including the sale and supply of potential future housing supply Hangzhou total will exceed 400,000 homes."
At current sales volume, that would take about 6 years to clear.

According to the "Hangzhou Daily" reported on March 25, the Hangzhou Municipal Government held a real estate business forum. Hangzhou Mayor Zhang Hongming stressed at the meeting, Hangzhou is at a critical stage of development of the new city, the real estate industry is related to the overall restructuring and development in Hangzhou, the real estate market to remain stable and healthy and sustainable development, to prevent "systemic risk."

Luocheng Wu introduced a "two-way control" as the basis, the Hangzhou government also intends to relax the purchase of real estate policy, has held several communication will be. Local housing prices including Hangzhou Greentown Group (Greentown Greentown Lily Sunshine Manor Apartments), Riverside Group and large national housing prices Vanke, Lake Real Estate ( Longhu times street [ News Price apartment Review ] Longhu Chianti Riverside [ Latest News Price apartment Comments ]), financial innovation in China, including 10 regional companies fangqi leaders or responsible persons attended the forum.

At the forum, Zhang Hongming, said: "To strengthen market monitoring and analysis, focusing on studying relevant policies, and constantly improve the surrounding facilities, classification regulation for land-paced, self-regulate and guide enterprises to continue to do public opinion to guide and improve the news release mechanism to guide consumers. rational view of the real estate market. "

As of now, Hangzhou has been no introduction of rescue measures.

In Shenmu, Shanxi, there are 260,000 square meters of empty property for a population of 400,000—and that is the post-boom population after years of big profits from coal. Pre-boom the population was less than 300,000.

And with the collapse of the real estate in the "Kuwait" of the East, Shenmu is facing serious decline.

Shenmu statistical bulletin shows that in 2013, the GDP of 100.3 billion yuan from the 2012 straight down nearly 10 billion was only 92.5 billion yuan. Revenue of 22.07 billion yuan from 2012 fell to 17.526 billion yuan, down 20.6%. Total fixed asset investment of 28.558 billion yuan, down 17.8% over the previous year.
Shenmu officials should declare a major policy of affordable housing. They will be hailed as geniuses.

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