Land Kings Still Frequent, May Face Life or Death in 2H

Tighter credit and slower home price gains could cause early trouble for land kings short on capital.

Xinhua: 楼市下半年的日子不好过了?地王或有生死抉择
Recent data show that a number of agencies, national home prices in June rose has narrowed, this may reflect the pattern of the second half of the property market. Reflect a number of real estate agency, the second quarter of 2016, China's major cities in the second-hand housing new tenants decline, the second half of the market will cool.

In the primary market, many industry insiders are worried that pre-market high-temperature high demand overdraft, insufficient follow-up market demand, housing prices will slow return of capital chain. Securities agency expects the second half of 2016, sales growth will continue to cool. From the accumulated data, January-June turnover of the area increased by 32.94 percent, compared to January-May dropped 3.49 percentage points. Transaction overall cooling trend has been verified.

As for housing prices, an additional source of funding - the development of credit, also may continue to tighten. A joint-stock bank in the third quarter following table shows the key projects, housing prices in addition to large projects, a dozen pages in the table, not even looking for other real estate related projects. According to reports, only large central rate of housing prices or housing prices backgrounds will be reported to the project, but even so, also repeated discussions and analyze the risks in the approval meeting. Some small banks and even the first half of 2016 did not put a development loan. Banking industry is expected in the second half will be substantially tightened bank development loan, the banks will focus on the development of credit risk.

"The first half of this year the country emerged 205 land kings, the king in June the number had another record." Zhang Hongwei believes that the first half created numerous topics of "prime" housing prices, in particular, need to focus on the potential risks. Especially those with limited strength but 'high premium' to get to the room rate, is more likely to face the risk of funding strand breaks or debt default. "In the second half of the property market will enter a period of adjustment in the background, 'land kings' may face a choice between life and death."
Land kings aren't going away quietly though, even as a slowdown is expected:
Sina: 土地市场火热地王频现 下半年土地供应料因城施策
Insiders said the second half of the hot city "land king" frequency may decline, but home prices are still likely to remain high, regulators will continue to regulate market transactions. At the same time, the supply of land policy in the second half will be more targeted.

...Senior vice president at Dandan Swiss Information Group, said the "land king" has been having a profound impact on the homebuyer's purchase decision, a number of regional "land king sites" have naturally rising home prices.

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