Yuyao, Zhejiang Sees Developer Slash Prices 40% in a One-Off Sale; Offical: Everyone Already Has 2 Homes

Yuyao, Zhejiang is between Ningbo and Hangzhou in Zhejiang province. Hangzhou is the epicenter for some of the recent price cuts.

浙江部分楼盘一次性直降30万 当地炸开了锅风险暴露

Rough English translation: Zhejiang Buildings One-Off Price Cut of ¥300,000; Blows The Lid Off Revealing Local Risk
A source told the " First Financial Daily "reporters, before this month, Shimao [ Introduction News ] Mou Lake Project 230 villas, a one-time opening more than 40% of sales price. Xiao Xu sales staff, told reporters that the average price of 230 villas about 150 yuan / sets, of which at least five sets of prices of 99 yuan / set, and after an internal pricing is 220 yuan / sets or more, the cheapest should also be 1.7 million yuan / sets.

In the industry view, the Lake Villa Le Mou big price cuts, just opened in Yuyao market "syndrome" tip of the iceberg.

......"Companies want money back as soon as possible." Le Mou Lake project sales staff Xiao Xu said, according to each average 1.5 million yuan to sell, B, C villas barely protected. He said the floor price of the land close to 4,000 yuan / square meter, the cost of each villa built at least 1.3 million yuan, "sold 990,000 yuan, at least to a loss of about 300,000 yuan." Before Mou surrounding Lake Villa price per square meter in about ¥20,000 to ¥30,000.

......"Supply is too big, the house too much, and now Yuyao property in a very difficult stage." A building housing the Bureau of Yuyao City department staff to accept the "First Financial Daily" reporters, said that this year the sales situation is bad , calls for housing prices, the pressure was relatively large.

......According to the Idea Real Estate Consulting Co., in March this year, the stock of housing 21,050 units in Yuyao,compares to Cixi, Xiangshan, Ninghai and Fenghua 3.28; 2.93; 5.69; and 36.86 times, respectively, accounting for 54% of the total supply in the five counties. In March, Yuyao new supply 584 units, is 1.59 times the sum of the other four counties.

......It is noteworthy that, one Yuyao City officials believe that every Yuyao household currently has at least two houses. Plus, listing far oversupply, house is no longer a people, "investment goods," low non-resident buyers demand, which means the potential purchasing power is declining. "Common problems Yuyao Real Estate current situation, but also the four-tier cities face."

......Currently, the resident population Yuyao more than a million, there are eight large urban complexes, as well as adequate housing four or five years of demand.

......"Real estate has bundled the entire Yuyao economy." The official said, the peak in 2010, Yuyao City, the land sale revenue was more than 10 billion yuan. Currently, more than 20 percent of revenue comes from local property taxes.

.....Yuyao city government report showed that GDP was 74.963 billion yuan last year, Yuyao, an increase of 7.3%; public budget revenue 10.634 billion yuan, down 5.8%; public budget spending 7.459 billion yuan, an increase of 10%; investment in fixed assets 44 billion yuan, up 21.7%, of which 13.303 billion yuan investment in real estate development.

......The official said that before 2008, Yuyao real estate development is relatively normal, prices are also relatively stable. However, after four trillion stimulus push to the large number of local house prices, land prices are doubled up in 2010, "the prefect name House" floor price of up to 17,000 yuan / square meter, a local "king."

.....These investment over the large room, the room for negotiation, financing capability and other advantages, to take place at least 30% less than the cost of local housing prices. Meanwhile, in a large room to improve the quality of Yuyao city, while also greatly squeezed local small room rate for survival, so Yuyao property into the "Developers predator competition" stage.

Housing prices in Yuyao, a local newspaper reporter admitted to the responsible person, Yuyao development is too big, they have no room for survival. Future development projects they are either transferred to a second-tier cities, or exit the real estate market.

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