China's Real Estate Market May Be Down For 2 Years

This opinion piece from Ai Jingwei forecasts difficulty for the real estate market, with improvement in the next one to two years unlikely. He is not pessimistic on September and October though, since strong sales and price cuts in the range of 15% to 30% will not break the big developers.

房价下跌成全国性现象 一两年内楼市或难好转

September has been to, real estate is expected to usher in a previous " golden nine silver ten "it? The basic answer is no, because this adjustment is really not the same.

We first review under the real estate market this adjustment, although housing prices began to fall from May MoM From the data, but the trend, the beginning of the year data Guaitou down trend is evident, as the actual market in late February Hangzhou opened the prelude to adjust.

The official August housing data has not been announced, but the July data, 70 cities, home prices fell reached 64 (an increase of June 9), flat four, up two first-tier cities fell, Royal Park Beijing also could not carry, which shows house prices is becoming a nationwide phenomenon, and cities can not be spared.

Overall data from the national perspective, sales all the way down since 2014, July national commercial housing sales area fell 7.6 percent, sales fell 10.5%, volume and price down, and the drop in price is even worse.

Although the past few months, most of the purchase of the city are gradually relaxed, but most are short-lived. Some data may refer to third parties, DTZ monitoring data show that from January to July, commercial housing sales volume decline in first-tier cities is 24.1%.

We then take a look at the cases, with policy advice monitor display, 1 to August total turnover of Shanghai commercial housing area of ​​about 5,416,800 square meters, representing a decrease of 29.67 percent, commercial housing sales price 26,328 yuan / square meter, an increase of 11.18%.

Well, spread to the country's price adjustment, the situation can not be spared even the first-tier cities, and fully illustrated, this is really not the same, and in 2008, in 2011 the two rounds of adjustment is not the same. A prominent factor is the presence of high inventory, so it is no wonder that the new building housing the office did not minister shouted "do everything possible to stock" slogan a few days.

Data show that as of July, the national commodity for sale residential area of ​​365 million square meters, a record high. Even by 2013 sales of 1.157 billion square meters, which is part of the sale have to digest four months, not to mention this is only for sale, but the inventory of hand.

CRIC data show that as of the end of August, north of Guangzhou-Shenzhen stock volume reached 10.4 million square meters, 8.37 million square meters, 9.17 million square meters, 5.33 million square meters, an increase of 30 percent year on year respectively, 25%, 42%, 25%, inventory digestion cycle of four city reached 18 months, 11 months, 13 months, 20 months.

And under the overdraft high inventories and 2013 the amount of days of sales area, as well as home buyers do not buy or buy up under psychological, "Golden September and Silver October," is likely to be a cloud. Such as Shanghai in August compared with the supply of commercial housing rose 6.3 percent in July, but the volume is only 653,800 square meters, but a decline in real estate directed at the "Golden September and Silver October," but the result was embarrassing. The author of the latest monitoring data received, since September several Shanghai real estate offers unprecedented intensity.

Currently restriction exists in name only, but I use three pre-purchase lift diagram to illustrate the effect is not so bad, as the mortgage release, although Shanghai ABC from August 2 million over a 5% discount mortgage, but most commercial banks did not follow up . Merchants Bank this week, mortgage lending has spread the news, but soon it was rumor. Market expectations of the heart can have, but the reality is so cruel, especially in the bad bank loan balance of this year soared premise.

The cash-strapped developers is certainty, from January to August, the developers of overseas borrowing scale approaching $ 60 billion. Recently, a friend on the table when it comes to a trust company, now only hundred developers to do the project, but the lowest cost 8.5 percent, and general hundred developers over at least 12%.

The author early in the "how much house prices fell space? "Mentioned, a single from the profit point of view, the developers under the premise of maintaining breakeven, with an average price reduction of 15% to 30% still can barely handle it. So, given the volume and price of the current round of price adjustment since the Qi down, real estate developers in order to "Golden September and Silver October," will not become junk, certainly in terms of price to come up with considerable sincerity.

But even so, the outlook is still not too optimistic, the author of a forthcoming monograph, from supply and demand large pair of scissors, price and cycle and bubble point of view, the Chinese real estate market in the past 33 years has been a running track deduction, deduction conclusion is far different from the first two round of adjustment, it is not within a year or two can end.

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