Housing Market Has Stabilized, But Risks Are Present

Four issues are in play according to the article linked below.

1. Bifurcation. First-tier and top second-tier cities such as Xiamen and Wuhan are rising in price. Elsewhere, the recovery is far more muted, if there is even a recovery.

2. Lack of demand. The price-to-income ratio is still large in many cities. Recent spikes in sales are likely due to pent up demand, not a permanent rise in demand.

3. Demographics (one-child policy results hitting) and population migration away from formerly successful industrial cities.

Management Consulting Rui letter president Xue regression noted above, the Yangtze River Delta, Pearl River Delta surrounding issues facing many second and third tier cities, because of local industrial transformation and upgrading is not successful, high-end talent flows to cities, the low-end population to return home, the population Drain increased year by year, resulting in the second and third tier cities successor sluggish property market.

4. Land finance still contracting.

Real estate data show that in 2015 Beijing land market supply significantly decrease. Analyst pointed out: From the point of view of land transactions in 2015 Beijing the average floor price of land rose by 26%, but because of decreased supply, Beijing Total land transfer in June 25 only 64.822 billion yuan.

Data show that the first half of 2014, Beijing land transfer amounted to 111.52 billion yuan, this calculation, the first half of 2015 fell 41.87 percent in the first half 2014.

First- and second-tier land sales are improving, but if land sales increase too much, housing supply will go up and put pressure on home prices.......

Conclusion:

To sum up, price rise difficult, be wary of the next crisis that follows the downward trend. Therefore, it has been held by a large number of real estate investors need appropriate reduction, especially reduction of the small size, low rental income, age-old estate. Do not let the media misled the investment direction, after soaring difficult period, it is the "bricks change to paper" time.

iFeng: 中国楼市到“砖头换纸”时刻 需警惕明日危机