More Than 1000 Homes in Wenzhou Returned to Banks, Worth More Than ¥6.4 Billion

Wenzhou's housing market peaked in 2011, but the abandoned home situation only became a big issue in the past year or so. This is in part due to the economic slowdown, but also due to the homeowners being severely underwater. As mentioned yesterday, Wenzhou borrowers used homes as collateral for loans that went for business and investment use. On the one hand, this supports the widely held belief that Chinese make 30-40% down payments and pay their mortgages. On the other hand, there are perhaps 50 million empty homes that would be prime candidates for jingle mail should prices collapse nationwide as they have in Wenzhou. Also, since these homes are clearly owned by wealthy individuals (average price around $1 million), the hit to banks could be substantial.

温州弃房已超千套 涉资产愈64亿
In the second and third tier cities to cancel a large area of commercial housing restriction policy this summer, in recent years has been modestly as "four-tier cities," Wenzhou, still is in the national media spotlight. With the mayor of Wenzhou City 陈金彪 words, Wenzhou prices has been the focus of attention a few years ago because the prices "high" in recent years because the price "down."

Continuous decline in the price of 34 months later, on July 29, Wenzhou Municipal Construction Committee held a news conference to formally release the housing restriction policy, while housing transactions are no longer registered in the verification of existing housing situation. Over the past year, Wenzhou repeatedly called classification regulation, the proposed restriction relaxed or eliminated.

Thus, the restriction relaxed city, Zhejiang Province, has reached five. Next round of purchase of the policy change in the situation of the property market in Wenzhou, is also quite intriguing.

" abandoned house "increased

From the purchase of a large province to province bailout, not simply "transformed", take a look at the situation in Wenzhou.

July 2014, "National Financial Weekly" reporter with the State Council, the fifth inspection teams to Zhejiang, Wenzhou, finance , real estate, private economic development status is the focus group supervision. Chen Jinbiao said Wen business groups react to economic changes and market particularly sensitive issue for the economic operation of the first step will be found.

At present, Wenzhou has been exposed to the risk is "abandoned house" phenomenon, a material "National Financial Weekly" reporter grasp show that since August 2013, Wenzhou "abandoned house" showed a substantial amount of growth trend.

According to Wenzhou Branch Banking survey, by the fall in real estate prices, the current Wenzhou "abandoned house" number has reached 1107 units, involving 6.404 billion yuan of bad loans.

The survey found that "abandoned house" There are four types of situations: First mortgage loans "abandoned house" number is growing rapidly; Second, commercial mortgage loans in the "abandoned house" rapid growth in the number; Third, a single set of "abandoned house" average implications of the loan amount up; four is the number of "abandoned house" focused on "mortgage plus guaranteed" loans.

As Chen Jinbiao said, Wenzhou, Zhejiang risk one year earlier than six months, Zhejiang again early in the country a year six months.

According to media reports, five or six at the end, Zhejiang, Hangzhou , Wuxi, Jiangsu, Fujian Ningde and other places are the owners of mortgage loans overdue for personal banking prosecution case was still. These cases, the owners are mostly claiming that "inability to pay."

There is no more data shows "off for abandoning room" has become a common phenomenon in the country, but the regulators have already made warning.

China Banking Regulatory Commission Chairman Shang Fulin in the first half of the National Banking Regulatory Conference and the economic and financial situation analysis meeting also said that "housing prices in some areas have emerged even breach the owners, some of the small room rate of capital chain tension, three or four lines related to credit Risk should be highly concerned. "

" three high "problem

According to Wenzhou Banking sector analysis, "abandoned house" First, because of external economic downturn, the lender's own business difficulties; two are "two chain" of risk continue to simmer, some companies stuck in a quagmire.

The so-called "two-chain" refers to the capital chain, guarantee chain. Such as Wenzhou Yueqing's largest construction companies - bridge construction group into a security quagmire, under the name of the market value of nearly 200 million yuan of land and property to be seized, Zhou Jianhua also the legal representative of the company in mid-December 2013, "on foot."

In addition, due to the mortgage price has shrunk while the proportion of the value of a "abandoned house" up to 56%, and more focused on high-end real estate mortgage loans, such as "Jin Yu Garden" dropped from a peak of 100,000 yuan per square meter to 3 million.

"Wenzhou real estate is the most difficult period in history." Dragon of Wenzhou City Real Estate Development Co., Ltd. Chairman Li Guosheng said that in September 2009? February 2011, the high bid to get to the project is basically in a loss situation. For example, Sanyo wetlands Jun Ting collar villa floor price of 23,000 yuan / square meter, the price is only 20,000 yuan / square meter.

Prices continued to drop or instant fallen sharply, Wenzhou's real estate market, the real economy, the financial system caused a huge impact. Because the proportion of real estate mortgage loans is too high, as housing prices way down, the value of collateral has shrunk dramatically, resulting in bank credit to shrink, thus amplifying the financial risks.

Chen Jinbiao said the Wenzhou real estate and the real economy, the financial sector particularly close ties, highlighting the performance of the "three high": First, the banking credit in real estate [ 0.49% funding research report ] financing accounting for up to 26%, higher than the national The average level of 8 percent; Second, the proportion of real estate mortgage loans of up to 58%, higher than the national average of 29 percent, due to falling prices, shrinking bank loans and other credit-related issues formed the proportion of non-performing loans 24.9%; three entities involved in Wenzhou high proportion of real estate, real estate financing at 180.6 billion yuan in Wenzhou, the proportion of business entities involved in real estate development and investment loans amounted to 66%.

This is a Gordian knot. When to purchase the property as a primary means "to invest" of policy implementation, a large number of private capital, "money begets money" logic is broken, the peak of private capital into the property market in deep debt quagmire unable to extricate themselves.

Tengxu such as Wenzhou Clothing Co., shares a lot of money upfront investment Wenzhou Greentown "Haitang Bay" real estate projects, the sale price is currently less than 20,000 yuan, with the project expected price of 30,000 yuan a far cry from, and sales are not ideal, capital returns slow. Affected by this, the company's chairman 徐云旭 recently "lost contact."


When the real estate cycle downturn of the economic cycle downturn superimposed Wenzhou, Wenzhou City, the entire house prices moving lower.

Properties Limited, chairman of Zhejiang Liang Yang Jianping, said the Wenzhou prices fell continuously over 30 months, not to mention the moisture squeezed dry, even the "Oxygen" almost gone, long-term "hypoxia" The market will be a big problem The.

Local financial crisis in the second half of 2011, hit the Wenzhou economy. From the lateral view, 2012 18 major economic indicators in Zhejiang Province, Wenzhou has nine countdown to the first, there are four penultimate; 2013 countdown has seven first, there are five penultimate. From the vertical perspective, the Wenzhou exports, consumer, industrial electricity consecutive negative growth in a long time.

According to Chen Jinbiao analysis, the fundamental reason is that their institutional, quality and structural problems: Because the industry generally "low small, scattered" and decided the economic transformation is lagging behind; family ingrained corporate culture, the influence of modern enterprise system; economic outward association degree, affected by the macroeconomic environment at home and abroad to earlier, larger; private capital keen quick money, profiteering, planted the seeds of civil lending storm.

The first half of 2014, Wenzhou achieve GDP 1827.95 billion yuan, up 6.8 percent over last year, and Zhejiang province's economic growth gap 0.4 percentage points in the first quarter widened 0.2 percentage points.

"Wenzhou's economy bottoming from the stable of critical juncture, not yet out of the woods." Chen Jinbiao said the problems for the real economy, Wenzhou raised from "off the real to the imaginary" to "adhere to the Industry" active "physical fitness."

For Wenzhou, the real estate, the real economy, the financial system itself, which ring is not good solution.

Can restriction relaxed ease "abandoned house" phenomenon? From the current situation, short-term contract situation is difficult to judge the effectiveness of the restriction relaxed. However, if the "abandoned house" had become "wise choice" will tend to lead to further deterioration in the credit environment in Wenzhou.

Chen Jinbiao said Wenzhou resorted to the "whole body tricks" to maintain financial stability in the - open financial reform, prevention first, credit reshape, to respond appropriately resolved.

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