Cross posted from Investing in Chinese Stocks:
The New Year has brought in the first bankruptcy for the Chinese real estate market, with a real estate firm in Ganzhou, Jiangxi province gone bust. The company owes nearly ￥2 billion in debt and the boss has been detained. He’s suspected of illegal fundraising among other illegal activities.
The firm also sold homes to customers and simultaneously used them as collateral for loans. In one building, dubbed a “disaster area”, there are 155 such properties. From iFeng (translated):
Enter 2015 on the eve of Jiangxi governor issued Ltd (hereinafter referred to as hair home) and Ganzhou silver letter Properties Limited (hereinafter referred to as silver letters home) has bankruptcy. The two companies are the legal representative for the same person, Shangyou court and county court were accepted XUNWU two bankruptcy case, which has become Ganzhou first case of bankruptcy estate.
“Daily Economic News” reporter learned from Ganzhou local police, the legal representative of the two companies had long hair has been on the Utah police on charges of alleged contract fraud control. According to informed sources, has long hair and fear are also suspected of illegal deposits from the public, withdrawal of funds and positions occupied and many other drugs.
Currently, the construction side, creditors have registered claims to court. According to data provided by the local court of creditors showed the registered home hair applicant claims 73, to declare the amount of 267 million yuan; silver letters home buyers credit reporting 240 people, to declare the amount of 1.693 billion yuan; the two companies total debt declarer 313 people, to declare the amount of 19.6 billion yuan.
As new home sales in Beijing surge, even though existing home sale prices are down nearly 6% yoy according to CREIS data, new home prices are up 1.8%. Sales surged in December, up 62% mom and 73% yoy. Sales hit 19,893 units, second only to the December 2009 total of 20,516 units. The next highest monthly sales figure is March 2013, amid the housing boom, when sales reached 19,398 units.
This sales report does not contradict this post, Beijing Real Estate Agents Drop Their Fees Again, since realtors mainly deal with existing homes. Furthermore, as the source article reports, those sales included affordable and owner-built housing. Take out those sales and the number of new properties sold sinks to about 10,000 units.