House Flipping is Dead in Wenzhou

Although Wenzhou's property market has started to revive, house flippers aren't making money, with small profit margins if they're lucky. The article below is long, going through the history of Wenzhou's property market back to 1998 and through the bubble that peaked in 2011. Below is the coverage of the current market:

2015 Year of the Ram at the beginning, some of the real estate agent has re-opened, it seems the market is expected to have improved markedly. Wang also clearly felt, friends around buyers confidence restored. According to reports, last year, Wenzhou city's 5.27 million square meters of commercial housing turnover, the urban second-hand housing turnover 1.96 million square meters, nearly 2 million units, are historical highs.

Although transactions beautiful, but after a year of operation, Wang found that real estate is no profit margin.

Wang said most of the Wenzhou real estate speculators still apply, only a few real estate speculators get out. Chen started to open stores, usually on the economic issues of great concern. In 2010, Chen sold the entire investment in real estate, Wenzhou, bring their wives and children the family moved to Hangzhou, and encourage friends around the big city to buy a house. Today, he accompany their children abroad to study life, enjoy themselves at the same time, more concerned about the stock market, foreign exchange and other capital markets.

Chen's view is that the proportion of financing is too large, high financial costs, although housing prices doubled before, but real estate speculators who trade frequently limited profit. Once stuck, if house prices had fallen by four percent, plus interest and other financial costs, real estate speculators are mostly insolvent.

An analyst at Guotai Junan Securities believes that the market economy stood in the forefront of Zhejiang Province, the local government and the people should not think most taxpayers' money to pay for these speculators, so the government did not take what real money to bail out the crisis, but central to fight for a financial reform pilot qualifications. After that, Wenzhou will enter a long and painful process of deleveraging passive, banks almost threw himself at the disposal of indigestion, companies are starting to issue bankruptcy cancer in clearing.

People's Bank branch in Wenzhou city Latest data show that the end of February this year, the city's local and foreign currency deposits for the first time exceeded one trillion mark, reaching 1.0051 trillion yuan; individual housing loans 105.91 billion yuan, accounting for 13.72% of total loans balance, an increase of 3.52 billion compared to the beginning yuan. In addition, the impact of the economic environment, loan growth of private enterprises and individual industrial and commercial households has slowed.

See reflected conceivable whole picture, Wenzhou sample is no longer unique.

In the hands of the high investment whirlpool, Lao Wang, and many investors are aware, it is the accumulation of dangerous bubble, the problem only when you should withdraw. At the same time, the lever and speculators to join, not only from the actual value of the real estate expanded, resulting in more traditional industries in Wenzhou "off real to imaginary," is tantamount to economic harm Qiaoguxisui.

China's economy is currently in a critical period "to the old sterile new" industrial transformation and upgrading, shared development, real estate market needs a smooth, balanced and healthy development. 13 years of ups and downs of real estate and huge economic losses, let Lao Wang know, housing prices have soared lost soil environment, "mainly housing inventory, the traditional business survival difficult, young buyers desire to weaken the asset allocation to Capital Market , real estate has come to the end."

iFeng: 温州老王13年楼市浮沉：“炒房已经到了末日”