Ningxia Housing Inventory Woes

While first-tier home prices are soaring, fourth-tier cities struggle with insurmountable odds. Reporters traveled to Helan county in Yinchuan, the capital of Ningxia. Eight years ago it became a hot bed of real estate development. More than 50 real estate companies operated in the city, with annual construction exceeding 1.5 million square meters for 5 consecutive years.

Today, there is 6.7 million square meters of inventory for 240,000 residents (28 square meters per resident). Prices are down 25% over the past three years and some existing homes are selling for less than 2000 yuan per square meter. There are "zero down payment" and even "zero rent" homes because there are so many empty properties.

For the new 5-year plan, the county estimates it can digest 4 million square meters of property by 2020, leaving 5 more years to go before current inventory will be consumed. The city is offering a 180 yuan per square meter subsidy to encourage purchases, but it may have little effect:

To speed up the de-stocking, Helan County earlier this year introduced a new policy, all in the Helan consumer purchase will be eligible for subsidies to 180 yuan per square meter. "This unprecedented government stimulus, compare the current buyers buy it, our real estate sales in the first quarter last year, equivalent to the hope that through the policy Dongfeng quickly digested." Ding Yan Great Wall in Ningxia Helan Sales Manager Group real estate development company said.

However, some experts believe that such a strong stimulation is not a permanent solution. Ningxia University Professor Tian said a new, previously relying on real estate development to achieve faster economic growth, pay attention to cultivate other pillar industries, too quick success. Now the property market problems, the government has introduced subsidies, tax breaks and other incentives, and even repurchase housing, intervention in the market too much.

Some industry insiders believe, such as Helan County in the western counties, must be "too late", timely reflection. Destocking process, but also correcting error correction, and promote the healthy development of the process, we must avoid the trap of large real estate alone. To adequately judged and control the development scale, so that real estate to become a "dividend" instead of "poison."

iFeng: 西部百强县的尴尬：昔日楼市狂欢 如今萧条