Shenyang in Focus

Shenyang is attracting a lot of media attention since it announced it ended the buying restrictions last week, only to reverse the next day and say the policy wasn't cancelled. Whether policy has eased or not is unclear. According to reports in this article: 沈阳限购松绑风波或引发连锁反应 二三线城市蓄势待发 (Shenyang Buying Restriction Easing Could Set Off A Chain Reaction; Second and Third-Tier Cities Ready), Shenyang loosened buying restrictions at the end of 2013 and hasn't been rigidly enforcing the rules. What it tried to do with the public announcement was bring the real estate market back to life. If the central government doesn't intervene (which may have already happened since they walked their comments back one day later), it could set off a chain reaction in other cities as they take it as a signal that easing policy is acceptable.

Media also ask: 为什么是沈阳:新建住宅库存居全国第二 第一为天津, Why Shenyang? It has the nation's second largest housing inventory at 22 months supply based on sales over the past six months and some estimates run as high as 32 months. Inventory increased 6% in April mom, 28% yoy. Due to the inventory pressure in Shenyang, it is expected to ease its buying policy eventually.

Analyst Wan Nan said, policy development is unlikely to bring a surge in trading. The main positive to improve the type of customers or customer groups and foreign buyers. Another wave of investment demand or partial regression, but it restricts the overall environment and the current credit policy, which is part of a substantial increase in the proportion of difficult.

"Just relax restriction, does not relax the loan market for Shenyang, almost no meaning." Wannan said.
I completely agree. The buying restrictions were aimed at stopping the hoarders from coming in and buying up blocks of apartments and driving up prices in the process. Now that the market has slowed, the speculators are disappearing. They're less willing to sink their own cash into a slow market and avenues of financing, such as rehypothecating copper collateral, are being shut. Once sentiment turns, it will run its natural course in the absence of a major policy intervention.


  1. I was in Shenyang in winter 2011 doing some research on retail mall development in the city and it really was a disaster. Upon landing and getting in the taxi I do what I always do - talk to the driver about the city. The driver began by immediately telling me that I should leave Shenyang that the city was 完了. That set the tone for the whole trip.

    At that time Shenyang was overflowing with mall development. Its main street already had something like 5 fullsized malls and another 5-10 under construction in the immediate vicinity. It was oversupply with the current operations and certainly was going to be overkill when the new ones come (came) online. I have not been back since then but I can only imagine that the malls are as vacant as ever... and they were quite empty (both of shoppers and tenants) back in 2011.

    Unrelated to the above but ever city I visit always has something special to it. Ask any local what is unique about their city and they'll say they farm some special fish, or some delicious peaches, or whatever. I asked everyone what Shenyang's 特色 was and they all said 沈阳没有特色 - seems they were right. What a lousy city.

    - Luke

  2. It is probably another case of the city selling a piece of land to a developer telling them they'll be the only retail project in the area, then a year later then sell neighboring parcels to developers with similar projects.