30-Minute Special on Hangzhou Real Estate Market

The Hangzhou price decline restriction story has gone viral in China. CCTV ran a 30 minutes special on the city's situation on their 《Business Half Hour》 program. Below is the video, the very long accompanying article.

Click through to see the video: 《经济半小时》 20140530 来自楼市一线的报道:杭州

The article is mainly a transcript of the report.

The first saleswoman interviewed says all the discounted homes have been sold and they cannot sell anymore at ¥10,000 /sqm because of the government rules, so the price is back up to ¥20,000 /sqm. The salesman just before 9 minutes in the video, when asked if prices would fall, said the odds are small because the government limits the price.

At 10 minutes, a developer said he set a low fixed priced on a building recently and it has still fallen in price. But his building is in a disaster area, prices are down 30% and even 50% and sales volume is still weak. He said they aren't buying any land because their land inventory is still large.

A developer at 14 minutes says developers are starting to cooperate on projects to reduce risk.

At 16 minutes, the voice over says that at this agency, the reporter saw people making calls all day trying to sell existing homes, but nobody had any success.

At 19 minutes, the agent says even existing home buyers want discounts of 10 to 20%.

At 21 minutes, a researcher says Hangzhou has 97,000 homes, among them 15,000 where developers obtained advance sale permits, but they have not sold the homes. Instead, they went to the bank and use it as collateral for loans. It will take about 16.5 months to sell all of this inventory.

At 21:30 discussion of land sales, in 2013 at the peak Hangzhou sold ¥130 billion in land. This year through May, Hangzhou has only sold ¥40 billion. He later says home sales are down more than 70% or 80%.

This paragraph sums it up:
Hangzhou prices really drop, if the previous preferential discounts were "still partly concealed", now you can use "straight down" to describe the market. Reporter's investigation found that despite the current rates of loosening the central city of Hangzhou is not obvious, listings away from the city center, as well as newly released real estate pricing information is quite favorable, price cuts are not groundless. As the price war spreads, on the one hand it has sparked discontent among property owners, on the other hand, there property market is seeing a positive atmosphere, for all this, what do developers think?

[After the experience of the Horse, "the first drop storm", Hangzhou property market but also involved in the "limit down order" whirlpool. Recently, Hangzhou prices, housing authorities jointly issued regulations, beginning from May 26, the price of housing prices all over the record price of 15% of the network will not be able to sign, the price needs to be reported, the market interpreted this move as a "limited descending order. " 】 Hangzhou estate murmur heard about the ups and downs of news, upsets buyers panic panic, and simply can not discern the true situation. To poke Rates Change the fog, CCTV Finance "economic half-hour" reporter Hangzhou estate field research.

Hangzhou property involved in the "limit down order" whirlpool buyers panic panic

Since February this year, the price shot Hangzhou first started. Dickson Beihai Park straight down 4,000 yuan per square meter. Tianhong · Champs immediately follow, starting from 17,200 yuan / square meter fell to 11,800 yuan / square meter. Then the major real estate property costs reduction, car bit concessions, multiple gift, smashing the golden eggs and other promotions on stage.

Into the second quarter, Hangzhou property market pressure to bear a greater risk of mid-May, the largest local real estate Hangzhou Greentown Song Weiping, chairman of the transfer of shares, Wharf Sunac China and completion of the acquisition, holding 24.313%, tied for the first Greentown largest shareholder. May 23, Hangzhou introduction of market "restriction order", the transaction price is lower than the record price of not more than 15% of net signed. Hangzhou property market is undergoing changes triggered further concern in the market. May 23, on the restriction order issued the same day, the reporter came to the northern part of Xiaoshan in Hangzhou, a real estate sector.

Sales staff: You are late, basically there is no good, and know nothing of this message.

"Economic half-hour" Reporter: Are you saying you were robbed?

Sales staff: Basically no.

The sales staff, told reporters before the house down more than ten thousand per square meter has been sold. The other is preparing a sale, but Hangzhou suddenly issued a "limited descending order." So had to discount to sell the house to sell not only a return to the price of twenty thousand per square meter.

Sales staff: Limit orders are now out, under the limit order beginning Monday.

"Economic half-hour" Reporter: What do you mean?

Sales staff: Housing Authority will not let down, because now if a real drop in some places, and people get cheap developer, he is now selling the land, then sell, and no one buys it.
The sales staff said that after descending order is limited, developers are faced with to get hit in the hands of embarrassment, and for consumers, there are some banks from the beginning of the first suite of mortgage interest rates will be adjusted to the maximum go up 20%. This all leads to the property market turnover fell Hangzhou cliff-style presentation.

Sales staff: Our monthly, then a month ago, then a person can still sell at least seven or eight sets, and now a month two or three sets of each person anyway.

Subsequently, the reporter arrived at Hangzhou Binjiang area of ​​an estate. They found that some people view room just to the place, not into the sales office on the left again.

"Economic half-hour" Reporter: get in here, ah? Let go ah?

Consumers: ah.

"Economic half-hour" Reporter: door shut it? Sales offices.

Consumers: not closed, there is someone to go with.

"Economic half-hour" reporter: no one with the entrance ah?

Consumers: ah, he was afraid it was trouble.

"Economic half-hour" Reporter: Why do you want to return home?

Consumers: is falling too much.

Came to the door estate construction site, the reporter saw a lot of people playing the black and white banner, prominently above the words "deposit back" "check out" a "trap" and other slogans.

"Economic half-hour" Reporter: Do you do here is to check out?

Consumers: Yes.

"Economic half-hour" Reporter: What is the reason?

Consumers: in front of a high-speed rail, then simply do not have a say. 

See reporters showed the intention to buy a house, which requires consumers to check out kindly reminded reporters that house prices fall much, should be carefully considered.

"Economic half-hour" Reporter: How much you was a square meter?

Consumers: We fixed the time it was the cheapest nearby.

Consumers: time to buy the most expensive, the cheapest ten thousand seventy-eight.

"Economic half-hour" Reporter: Now what?

Consumers: now eleven thousand eight hundred.

The consumer explained that before the prices per square meter ten thousand seventy-eight now become eleven thousand eight hundred, seven thousand six straight down the house. Coupled with the worry that the high-speed rail nuisance, so they forced to check out claims. See the reporter insisted Qukan Fang, a consumer up advice.

Owner: this lot rob a house you do not rush, do not rush, rush house this lot are not up to grab. When real estate to build a high-speed rail, you can not sell 5,000 yuan a square. 

Part owner of the name "check out" the banners

Part owner of the name "check out" the banners

Reporters found that the refund check out here requires owners of more than 20, they just sat quietly banners, no one to deal with their complaints.

Owners say exactly how regarding high-speed rail construction going on? Now the prices really like the owners say is a six-seven thousand per square meter fell right, the decline in value so much, because the repair high-speed rail, there are other factors that lead to? To uncover these questions, the reporter to the sales center, but came to the door was stopped by security.

"Economic half-hour" Reporter: We came to see the master of the house, can be hired?

Security: have someone with you.

"Economic half-hour" Reporter: I have a friend, specifically gave the phone.

Security: You call him and let him come pick you up.

After some reporters contacted to confirm the identity of the reporter was showings after a sales staff to come to collusion. He explained to us the real reason for the sales office is containment.

Sales staff: We price this price about 360,000.

"Economic half-hour" reporter: that a house?

Sales staff: ah.

"Economic half-hour" Reporter: They say that high-speed rail how things ah?

Sales staff: No, wait a minute the sales office told you this thing, then here is also not particularly comfortable.

"Stay away from high-speed rail is also my school district," the silent protest

"Stay away from high-speed rail is also my school district," the silent protest

The sales staff to explain once again affirms that high-speed rail construction has never been approved by. The key is too sensitive to recent substantial price cuts.

Sales staff: At the time of the EIA car safety investigation if not passed, the railroad is not made, so to buy this land. Last year's words are not the things people say high-speed rail and the school district this year mainly because they (consumers) proceeded to lose a large part of the money.

Sales staff explained that this project is not short opening time, developers hope to return the funds as soon as possible, so the prices reflect market several changes.

Sales staff: Originally, we sold last year at a total price of $ 74 floor price of 10,007 $ 19, the equivalent here now costs about 6,000 financial full count, then the cost is 6,000, then sold 10,007 $ 19 is profit.

Last year's prices have sold seventeen thousand nine hundred per square meter, but the start of the year, Hangzhou and then greet price surges. They are forced to cut prices.

Sales staff: Hardcover, then 10,003 thousand five or so. Each apartment, the whole case is that each apartment is down 3,000 5-4 thousand or so.

Although prices fell, but did not return as scheduled sales. In order to attract customers, they played a special room.

Sales staff: the cheapest is the set of 11800.

From 17,900 to 11,800, a significant drop is straight-out claims fuse owners. And the sales staff bluntly, this situation some of the price of real estate in Hangzhou are prevalent. Leave the Riverside area, the reporter went to a nearby sales center Qianjiangxincheng central enterprises belongs. Although the weekend, but no sales offices throughout the room to ask a consumer point of view.

Sales staff: We are more than 900 households, and now the word is left more than 200 families, mostly large, 170.

"Economic half-hour" Reporter: This is what opened the year?

Sales staff: 2012.

"Economic half-hour" Reporter: It is nearly two years time.

Opened more than two years, as well as a quarter of the listings did not sell, the sales staff was market before, but he currently has his own understanding of prices.

"Economic half-hour" Reporter: Do you think the prices will drop you here?

Sales staff: drop if unlikely, because here it is not out of a limit order. Therefore, government regulation, then again, the first did not want the price rise too high, but do not want the price to go down. If you go down, it will certainly cause a lot of consequences. This is a government, the whole, the majority of government revenue it is land.

Hangzhou prices partly concealed lute no longer crazy "straight down"

Hangzhou prices really drop, if the previous preferential discounts or "still holds partly concealed", now you can use "straight down" to describe. Reporter survey found that despite the current rates of loosening the central city of Hangzhou is not obvious, but some listings away from the city center, as well as new real estate released pricing information is quite favorable, price cuts are not groundless, as the price war spread On the one hand is the purchase of property owners has sparked discontent, on the other hand, it is rising property market in Hangzhou see atmosphere, for all this, the developer now is how mind?

Zhu Lidong Hangzhou, where the local real estate company is a veteran business. Earlier this year, after the first price in Hangzhou two properties, they also add to price changes, followed by the amount of force.

Riverside Group Deputy General Manager Zhu Lidong: four real estate when we set the pricing on the relatively cheap price of less than 10,003, it was another brother leading private real estate when he met you like this real estate given the low price, but from the price point of view, given the real estate prices, the price itself is a heavy hit.

However, what is worrying is that the market has entered a freezing of Hangzhou, regional house prices more than 30% or even 50% decline, the price did not return a considerable volume.

"Economic half-hour" Reporter: So this, then, Riverside and took new land it?

Riverside Group Deputy General Manager Zhu Lidong: So far not yet.

"Economic half-hour" Reporter: Why would not such an action?

Riverside Group Deputy General Manager Zhu Lidong: our inventory, the amount of reserves, or more. If you follow the sales, according to the current price to calculate the value of sixty billion is probably still around. So, included in Hangzhou, including in the field.

Zhu Lidong told reporters that their biggest task is to consume the stock as soon as possible. However, due to low mortgage interest rates, there is no obvious attraction when the asset transfer pricing. Therefore, the real estate company's financing is not optimistic, especially some of the weak developers, in order to maintain the capital chain, regardless of the cost of shattering, hides a huge risk.

Riverside Group Deputy General Manager Zhu Lidong: Hangzhou soil in accordance with the words of your teeth, you can top, top How much time? Your roof, for example, like us, longer than some people may be able to top the time, but you say that the market bad for six months, it can be a bad year, or even a year and a half bad, bad years of it, you see who can stand?

Zhu Lidong frankly stated at the time to get involved in the real estate market in the past two decades, he often travels with shackles feeling is, when you need to buy bids, the highest price can be rather time to sell the house, the purchase of a variety of limited credit policy has affected the market, as a developer, he was really looking forward to strictly follow the rules of the market business environment.

The price of real estate open quotient play slogan

The price of real estate open quotient play slogan

Riverside Group Deputy General Manager Zhu Lidong: land market, product sales market, and a social order in which the transaction is also a market, then you die to live your own choice. But now the question is often, it is sometimes the market, sometimes administration.

And Zhu Lijun originated native is different, Wu Wei from Shanghai after the real estate company started stationed in Hangzhou market. But over the past two years, the ups and downs of the real estate trends in Hangzhou, so they had any time to adjust coping strategies.

Wu Wei, vice president of Jingrui Property Group: When we started, we entered the Yangtze River Delta is the third-tier cities, for example, we begin the first project in Zhoushan, Zhejiang here is the project, we have Huzhou project late, but we Two years ago we made adjustments to the overall strategy, we are more concerned about market performance in the Yangtze River Delta here is relatively good second-tier cities.

Wu Wei told reporters that in 2013, Hangzhou city's land premium of up to more than 1300 billion yuan, ranked in the forefront of the country. They had entered the market to get high, but no less than once per auction fever premium rates should allow them to make the most prudent judgment.

Wu Wei, vice president of Jingrui Property Group: Although we said that last year, and now it is three took place, but in the end we may live hundreds of reconnaissance on the block, we may be several ten Keyan, we participate in the auction also took three or four ten, so that behind all this there is a lot of work to do. But these things do not do so, it might make some of this wrong impulses.

Although a summer, but according to Wu Wei with ice to describe the reality of the real estate market. Many developers now facing a "price dead loss, not price die" situation, in order to reduce the debt ratio, they are more willing to jointly develop, together with other developers, "heating."

Wu Wei, vice president of Jingrui Property Group: From the current market situation, will take some more cooperative manner, with some room to do some joint enterprise development, cooperative manner to do some projects, so in fact able to mitigate some of the market risks.

Severe adverse impacts to the real estate agent market situation increasingly depressed secondary housing market

People familiar with the property market in Hangzhou remember, February 15, 2012, Founder Lotus Pond fired the first shot of the price of the property market in Hangzhou Dragon, more than 160 houses were sold out basically. Followed by La Cité in the sea and other real estate sectors have followed suit. Year in March, Hangzhou property market Jedi, rushed volume sets 4319, almost equal to the peak in 2009, the "price change" effect is very obvious. However, the same is the "price" began in 2014 in Hangzhou property market already shrunk. As the film felt by developers, which will generate future regional market pressure is not small, and this pressure is rapidly transmitted to the secondary housing market.

Although the current market situation more severe, but the store manager Zhang Xiaodong daily morning meeting must be unshakeable. Mobilizing and encouraging employees to become the main work of Zhang Xiaodong recently.

Sumitomo Realty Mandarin store manager Zhang Xiaodong: This year's prices will Yishoufang words, relatively deserted, some customers, it may be out of the school district, or lots of considerations, will settle down will buy second homes, so for us to , said after the Housing Fair is an opportunity.

Zhang Xiaodong told reporters that the just-concluded Hangzhou Housing Fair, the number of houses on the first day turnover of only one. Called bleak. Let Yishoufang market slump has become secondary housing market bust up.

Intermediary Clerk: Hello Chen, I was Wang. Today you see the house? Karrie Xiyuan there is a 97 square feet, the price 2,600,000. House well, you have not seen, and read like talk about it later. Do not look ah.

Second-hand housing intermediary posting ads

Second-hand housing intermediary posting ads

During the reporter shooting, although the staff were kept high emotions, kept calling visit customers, but without a clear intention to purchase. Zhang Xiaodong also explained that, unless it is just to be or have special requirements, or second-hand housing turnover is very difficult.

Sumitomo Realty Mandarin store manager Zhang Xiaodong: We deal in a month, is 20 sets. So like this year, then in March, then there is no. So this month, as we have a store in itself, then, in general, it is one of about seven or eight, just like the current deal four this month alone.

This real estate agency at the door, the reporter found that posted a substantial recruitment revelation. Because the open years, the amount of monthly orders decline, facing sluggish market, many agency employees were forced to resign.

Zhang Xiaodong: Some brokers, then there might not withstand the pressure of the atmosphere which, like our side, then there are four or five months, did not open a single class, and there may exit the industry.

Zhang Xiaodong explained that he was familiar with many of the stores are currently not profitable, this state if one stays for six months, still no big problem, but what happens after six months, he was very worried. Face an uncertain future in the future, he is very good year to miss the market.

Zhang Xiaodong: Just like the year 2009, it is possible to earn back the money the year after. That includes last March there may be some good broker month, six months or a year-round money back, and the market is not about us.

Intermediary stores at the door, the reporter met a rushed over from Fujian old couple, after they heard this time it is real estate prices in Hangzhou, came to see the house.

Consumers: We want to compare. We compare with Xiamen, in the end is here, your house, your house or Xiamen.

"Economic half-hour" reporter: now have the results yet?

Consumers: Now not the result of it.

"Economic half-hour" reporter: still another look.

Consumers: ah.

"Economic half-hour" Reporter: Xiamen seems to have gone up.

Consumers: Xiamen amazing rise in the past with this place very far. Now up so badly.

In order to cope with the cold hand housing market, low turnover, since this time, another store manager Wei Shun-chi also started Yishoufang agent through interactive effects of the two markets would like to increase orders.

I love my family Gudang national store manager Wei Shun Chi: We in the secondary market for the extension, and then did not get the primary market, the customer used look bad, we'll take him to see first-hand, the relative hand we can also sell the same with the second-hand demand.

Wei Shun-chi told reporters that the property market sentiment is very serious, and consumer prices will continue to cut prices also have expectations. So, put out a lot of second-hand housing information, consumers generally heart-priced even lower than the listing price of 10% to 20%.

I love my family Gudang national store manager Wei Shun Chi: basically no more than two million of us here the cheapest Gudang 68 million, the highest set was 1.55 million, so we just need to fit it also.

In order to stabilize the team, reducing the risk of closed stores, Wei Shun-Chi has previously responsible for the development of a new core area two blocks, think through better allocation of resources and services to enhance the volume of orders.
I love my family Gudang national store manager Wei Shun Chi: Now a lot of policy uncertainty, customers are likely to wait and see, Hangzhou, prices start from March 2012, it had never been dropped.

From the anti-inflation policy shift could plunge into anti bring about real change in
the real estate market changes, often particularly sensitive to the feelings of the intermediary, from the movement of persons, loss of this market will be able to feel the change from hot to cold. So, the local government from the anti-inflation policy trends into anti-crash, Hangzhou property market will bring change?
Hangzhou property market has evolved from a variety of promotional discounts to straight down, then the change in the situation of the property market in Hangzhou, is a problem locally, or to some extent reflects the overall trend in the property market it?

Hangzhou new market opening statistics

Hangzhou new market opening statistics

Chenguang is a research property information professionals, Recently, he and his team have been through the most first-tier property market research data to analyze the market. He said that property prices down, which is slow to melt and listings, overstock serious are directly related.

Chief analyst Easy Home (China) CRIC Information Group Chenguang.Nonhydrodesulfurization: Throughout the inventory for not only inventory statistics, then restricted space, is that he got the pre-sale permit, but he did not sell, he is a direct mortgage to the bank, about fifteen thousand units, so the whole entire large urban Hangzhou, including Xiaoshan, Yuhang inventory is ninety-seven thousand sets, then the need to spend about sixteen and a half months.

Major is a real estate research firm in charge of local people in Hangzhou, Hangzhou, in his analysis of ten years of observation, that the current real estate prices and market volatility, it is derived from land sales in recent years, Hangzhou, developers mad rush ground results.

Han Jia real estate consultant John Major: Hangzhou peak can be sold for more than 1300 million of land in 2013, when, at its peak in 2009 can be sold for more than 1100 million of land, now much faster in May , and nearly half, but we land premium was hovering over 400 million.

Hangzhou land sales last year, up more than 1300 million Major judgment, according to the current price of ironclad static properties of loss or suspected loss will reach 30 or more. Then add the annual purchase volume in Hangzhou exactly how much? The time required to digest the land it? Analysts Chenguang gives such data.

Chief analyst Easy Home (China) CRIC Information Group Chenguang.Nonhydrodesulfurization: we measure it, the whole of Hangzhou, add new licensing of these people probably seventy-three thousand pairs, and then add the population, the new population in Hangzhou is about twenty thousand people. According to certain factors we considered, then the stability of the entire annual volume should be 55,000 at Hangzhou set to sixty thousand sets.

But that was not because of the fall in prices and exchange trading volume rises. Those supporting a steady annual turnover of the crowd, watching the mood is very strong, with the land market cooling, home sales in Hangzhou also enter "sleep" state.

Han Jia real estate consultant John Major: So far the statistical May 20, we only sell the annual 1.9 million square meters of housing, 1.9 million square meters of this amount accounted for 10 million of us, good amount of 8,000,000 , not to the amount of 6,000,000, third, or fifth, so this fall is very obvious.

However, China Real Estate Association researcher Lee Station army has held relatively optimistic. He believes that China's current construction is far reaching foreign urbanization ratio of 70%, the real estate market still has a long period of development potential.

China Real Estate Association chief researcher Lee Station Army: I do not agree with that argument simply crash and the inflection point, I think this decline is normal, the key is 2014 1-4 month, real estate transactions in 2012 than in 2011 or higher So I think this is a normal.

Lee believes the military station, a market analysis is good or bad, and not only from the ability to analyze data such as volume, the key depends on whether the ability to maintain an area of ​​continued investment. From his research data, one to four months, the magnitude of investment in Hangzhou property market even more than the national average.

Hangzhou eight districts of commercial housing stock charts

Hangzhou eight districts of commercial housing stock charts

Chinese real estate Station army chief researcher Lee: In today's economic conditions, real estate development and investment, to have a 15.7 increase in China among all the various economic industries, should say it considered high.

"Economic half-hour" Reporter: Is the country. That Hangzhou it?

Chinese real estate Station army chief researcher Lee: This is probably the case in Hangzhou, Hangzhou and development investment in terms of the total investment in real estate development completely 1 to April 53.9 billion, compared to last year, there is a 36% rate of increase.

But Liu Chenguang in his study found that the amount of excess inventory in Hangzhou, at least a third from a few years ago real estate speculators and real estate speculators who formed inferior stocks, these stocks will inevitably bring to the property market in Hangzhou stage adjusted.

E-House (China) Holdings Limited grams and chief analyst at Swiss Information Group Chenguang.Nonhydrodesulfurization: Too many manufacturing companies, too many traditional businesses, entered the real estate industry. Then if, in fact, there is not much development capabilities, but earn too much money, earn easy. Then came the market, they have no presence in product innovation, targeted reforms, or aspects of corporate governance, marketing, sales promotion and related efforts to do, so that today they have formed, the formation of the 30,000 sets in Hangzhou inferior stock, sell are not sold for three years. Therefore, we believe that this part of the business is supposed to be adjusted.

In fact, China Real Estate Association researcher Lee Station army most worried about is the quality of housing, if this also with falling house prices, he believes that this is the Chinese real estate market is really a crisis.
China Real Estate Association chief researcher Lee Station Army: I'd be worried about this situation, when a bad market when prices go down, the development of enterprises to provide housing for the quality of their own product prices decreased. I want lower prices, while not reducing the quality of quality, if the quality of lower quality, the market in my opinion is the real turning point, a real collapse.

[Half-hour observation]

Adjust prices in Hangzhou, not even speculation on the clamor dust collapse, but the situation is further apparent differentiation property. So, what criteria is it the property market collapse? According to foreign experience, the property market collapse must occur because of economic stagnation caused prices fell sharply circumstances, but fell by more than three years, such as Japan's "lost decade", and the United States in 2008 after the financial crisis of the property, may be considered collapse . The situation in Hangzhou, but not so. Of course, the phenomenon also remind the market price necessary risk prevention measures. Including Ordos and Wenzhou, falling house prices, has shown that after the past 10 years of rapid development, China's real estate industry is indeed in some respects has accumulated a considerable degree of foam, and local government reliance on land finance, but also makes a lot of cities Real estate investment and development over the scale of demand growth, if not adjusted, risk is difficult to avoid.

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