Cross-posted from Investing in Chinese Stocks.
Sales surged during the Dragon Boat Festival, driven by the spread of buying restriction rumors.
In just the last three days Dragon Boat Festival holiday, the Beijing property market ushered in blowout commercial and residential projects. Statistics show that during the Dragon Boat Festival (June 9 – 6 11 February), Beijing commercial housing (excluding affordable housing and from the housing) a total turnover of 2503 units, of which commercial products total turnover of 2286 units, accounting for up to 91%. From the turnover ranking point of view, during the Dragon Boat Festival Transacted top ten items are commercial products, which ranked first in the number of projects still peak One three days contracted 941 units, Lincoln Park signed 636 sets, the sum of the two projects deal That accounted for all the commercial housing turnover of 63%. Analysis of a number of property research institutions, Dragon Boat Festival holiday volume soared due to the purchase of commercial rumors.
Developers may have also rushed to sell, for fear of a repeat of the Tongzhou massacre. Buying restrictions causes sales to plummet 96 percent:
After May 5 Tongzhou residential restriction, market rumors Mentougou residential net signed product pause, then began to spread across the industry, “Beijing will be fully residential restriction” rumors. Mentougou later found commercial product pause just a routine check-net project, “Beijing will be fully commercial purchase,” the rumors have not been confirmed. But developers still causes tensions, Tongzhou “commercial” The result of the purchase to allow developers to be more sensitive to policy. Statistics show that after May Tongzhou residential restriction, the whole area of commercial and residential products monthly turnover of only 271 units, equivalent to only 4% in April volume. Thus, a number of commercial and residential projects in other regions Beijing considerations of risk aversion, began to pay close attention to signing.
One developer insider, according to his understanding, the purchase restriction is already a high probability event, but time is uncertain. Relevant details may still discretion in. Some developers have been quick to promote the sale of flats speed Beijing Centaline analyst Dawei statistics, in the past the Dragon Boat Festival holiday, the top two items were signed 4.452 billion and 3.406 billion yuan. In order to win the domestic crown Shunyi District, commercial and residential projects Shangfeng No. One example, as of June 13, the signing of the project has reached 5.725 billion yuan, but nearly 54 billion of signing a few days recently. That is to say, from August 2015 opening the project began, and now nearly 10 months, the project nine months after the sales of only about $ 300 million.
The article closes with a speculative forecast. Beijing has sold 218 plots of land in the past four years and it represents a potential supply of 200,000 homes. If buying restrictions were to be as “effective” as in Tongzhou, a similar decline in sales combined with rising inventory could push prices down by roughly 30 percent:
According to statistics, 2012-2015, Beijing government sold 2018 plots of purely residential and commercial office space land, planning construction area of 30.83 million square meters, including residential and commercial leasing of land 156 plots, planning construction area of 23.99 million square meters. But only 8.77 million square meters has become market supply, accounting for 36.56% of all transfer area of 23.99 million square meters. Potential supply of commercial housing is enormous, even more than the supply of commercial housing.
Calculations based on Dawei, Beijing next class apartment potential supply of about 210,000 units, calculated in accordance with an annual 20,000 units of volume, would take at least 10 years to sell, if the market purchase volume will fall by 80% -90%, at a minimum the average transaction price price will decline more than 30%.
iFeng: 北京商住房限购成大概率事件 未来价格或下跌
The overheating second-tier cities are cooling and the activity is moving on to cities that lagged, such as Chengdu, where real estate policy remains supportive.
following Shenzhen and other north after cooling urban property transactions, Suzhou , Nanjing , Hangzhou, property transactions and other hot second-tier cities substantial cooling, but other non-hot property market in Chengdu second-tier cities continued to rise, so the stock sale area is further reduced.
…Yan Yuejin view, the cumulative increase in real estate sales data has narrowed and the current second-tier cities began to cool, for example, the more popular Hangzhou, Suzhou, Nanjing, Hefei, Tianjin and other cities have largely seen the market transactions fall, in part because demand was satiated among other related factors. There is no reason for a similar crash in other second-tier cities, Chengdu and other non-hot markets have seen transactions begin to rise, which for the entire real estate market transactions to maintain the heat still have a positive effect. On the other hand, if buyers expect buying restrictions in second-tier cities June may still be positive for hot second-tier cities.
Sale area of commercial housing and commercial point of view continued to decline, with third- and fourth-tier market situation related to the overall city better, but also reflects the destocking actively implement the strategy effectiveness. Yan made the leap in to the inventory at the same time need to guard against the risk of rapidly rising house prices, in particular, similar Kunshan, Wuxi, Dongguan, Langfang and other cities surrounding the four-tier cities, destocking effect is good, but housing prices are more obvious. The destocking effect other Midwestern tier cities more obvious at the same time, prices rising trend is relatively mild.
iFeng: 苏州杭州等二线城市楼市开跌了 哪些地方还在支撑
Meanwhile, land hysteria appears to be topping, from the Guardian: China’s Bordeaux: winemakers in ‘gold rush’ to turn desert into vineyards
In 2012 she opened a vineyard on the stony eastern slopes of the Helan mountain, wagering that its parched land could produce world-beating wines. “There was nothing,” Gao recalls, weaving through newly planted lots of cabernet sauvignon, chardonnay, marcelan and petit verdot.
Four years on and a scramble for land is under way here as Chinese and international wine giants and super-rich would-be vintners follow Gao’s lead, ploughing fortunes into Ningxia wineries.
“It’s a gold rush,” says Fongyee Walker, a Beijing-based wine buff who learned her trade as the head of the Cambridge University Blind Wine Tasting Society and has made numerous trips to Ningxia province.
…Experts fear the dramatic influx of wine producers to Ningxia means there will simply not be enough water to support the industry. “Winemaking requires on average six to seven litres of water for every litre of wine,” says Walker. “Where is it going to come from?”
Soaring land prices are also causing small producers such as Gao to lose sleep. “Before it cost nothing; now it’s very expensive. Maybe 10 times more,” she says.
Something tells me the land sellers will be the big winners…
