Liaoning Housing Market Declines, All Rescue Efforts Fail

Recently Liaoning launched a 5-part plan to rescue the housing market. Liaoning has been a subject here several times due to the major slowdown in the local economy, which manifested in a collapse in real estate investment in late 2014 and has continued contracting in 2015.

The latest 5-part plan follows a 9-part plan from April that failed to stimulate demand.
April 8 this year, the provincial government released nine measures to stabilize housing demand (hereinafter referred to as "Liao 9"), the minimum down payment ratio and personal housing accumulation fund loans adjusted to 20%, while in turn transferred the 800,000 line of credit on top Yuan.

"Liao 9 introduction, Liaoning deal on the property market in local rise, coupled with this year in April and May the national property market to pick up, a number of projects in some cities of the province there 'hot', but with the rest of the red in May compared to most cities in Liaoning transaction data is still not ideal. "Liu Jing said.

In the capital city of Shenyang for example, statistical data local official website show that in May, Shenyang real estate transactions in the area of ​​1.146 million square meters, down 12.74%, of which commercial residential area of ​​1,044,000 square meters, a decline of 10.14%.

For this reason, most large development companies have slowed the pace of investment, and project planning has to be adjusted.

"At present, Shenyang, Dalian, Yingkou and other places, there was greater area of ​​downtime phenomenon. Many developers fear built a house can not be sold, it is the first to subscribe. Subscription was better to start, if the situation is not good Subscription left off." Liaoning A local developer told reporters.

Turnover in the doldrums, investment slowdown will undoubtedly make local government "headache" and the amount of days inventory is one of the biggest problems facing the real estate market in Liaoning.

According to public data, Shenyang currently has 27,966,000 square meters of houses for sale, Dalian, there are 15 million square meters of inventory capping; Yingkou potential supply in 2012 had reached 13,626,700 square meters, less the last two years in spite of new real estate, but the deal has been in the doldrums ; Fuxin City, as of May 25, there are 57,084 units for sale in the state.

"On one hand the overall real estate development in Shenyang large body, the hands of developers more land reserves, higher housing stock; on the other hand, the current Shenyang proportion of owner-occupied housing groups about 80%, the overall property market demand is weak," a local Liaoning people in the industry said.
Does Yingkou ring a bell? In Yingkou, Liaoning Unfinished Buildings Stretch For 50 Square Kilometers; Real Estate Graveyard

It's game over for the development model. There was overbuilding post-2008, the youth are moving away (or were never born), the buildings are empty, massive investment is needed to build infrastructure around the empty housing to give it a chance at being viable, but the land finance model is past.
"Although so far this year in March, the central and local Liaoning repeatedly introduced stimulus, however, over the real estate market development, population exodus and aging of the population has led to Liaoning Transaction weak, the market is expected to continue down a series of problems." An industry Analysts pointed out.

"Four trillion by land finance and policy driven, three-year investment in Liaoning Province in 2008 after strong, have voted to build around the zone, but the last two zone residential occupancy rate is very low, many buildings vacant." Liu Jing told reporter.

According to media reports, a deputy director of the Development Zone in Liaoning has said, the zone more land, land sales in the previous decade between climbing, but the corresponding infrastructure from scratch, but also the huge investment, land finance model increasingly difficult.

"Over the last two years, the annual net inflow of Liaoning Province, only 20 million of the amount, the data compared with five years ago, almost half less, while the case is still increasing exodus of young." The Liaoning local industry analysis.

iFeng: 辽宁再发“辽5条”救市 多轮刺激政策仍难挽颓势

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