Related News
Home
» City specials
» Hangzhou
Real estate market reaching critical point
By Shi Xiaohan |
September 27, 2011, Tuesday
|
Print Edition
Print Edition
JIN Suhua attended a real estate sales tour last Saturday with her husband and her five-year-old son. "We need to look for a new apartment for our family since our son is growing up," said Jin, "and since the real estate price is said to be dropping now, we think it is time to buy."
Like Jin, many of the over 200 attendees of the tour are considering to buy a new house after the sign of lowering prices indicated.
"Though high-end real estates of around 60,000 yuan (US$9,390) per square meter see their prices stable; developers of cheaper real estates have started reconsidering their prices. Several have already taken the lead to offer discounts," said Ding Jiangang, an editor of Zhejiang Online's property section.
Hangzhou's residential properties have long been criticized as overpriced. According to the China Real Estate Index System, the real estate price of Hangzhou in August was ranked the second in the Chinese mainland with an average price of 20,959 yuan per square meter. The price is almost on the same level with the top-ranking city Beijing (21,202 yuan per square meter) but much higher than Shanghai (14,987 yuan per square meter). However, the average housing price in Hangzhou has already dropped by 9 percent in August compared with July.
Due to the vibrant private sector in Zhejiang, people from cities around Hangzhou have been flooded the province's capital with their investment in the real estate market causing complaints from local residents who want to buy an apartment.
The central and local governments on the other hand are bidding to change the situation by implementing policies to clamp down on property speculation and runaway prices. Followed by the guidelines issued by the State Council in January this year, Hangzhou government released its policies for real estate market in March including refusing bank mortgages to buyers of three or more homes and building affordable houses.
On August 3, the Hangzhou Housing Management Bureau stopped the popular practice among property developers that gives consumers some discount after certain amount of pre-payment.
The land transfer rate shows no signs of backing down. In August, the land transfer rate for residential properties still went up after a dramatic doubling in July indicating strong confidence of developers. On the other hand, the housing stock in Hangzhou has reached record high. Until September 24, over 22,000 residential properties were reported in stock.
"It is still too early to tell whether the price has reached its bottom as we are not sure whether the government's tightening policies will change," said Ding. "My suggestions for the buyers are to look carefully at the apartment they would like to buy and be prepared for its devaluation if they are not buying the house for investment."
Some real estate developers, however, say the home price has already touched their bottom line.
"We got the land for 10,000 yuan per square meter and now we are selling the houses at 16,600 yuan per square meter on average. It is almost our cost," said Ni Wuying, deputy manager of Sunshine Garden, a residential community project.
"It is hard to sell houses now as the price is changing and the consumers' anticipations are unstable. That is why many real estate developers are waiting till next month or even later to start selling," said Ding.
While the market still remains unpredictable for buyers, investors of high-end real estate have found a new way out for their money.
On Saturday, the first Hangzhou Overseas Real Estate Exposition kicked out. The three-day exposition offered a choice of not only real estates across the world for investment but also in some cases emigration.
"Hangzhou is a new market and we are just doing some market tests and promotion this time," said Feng Chong, employee of a Sweden real estate developer.
Different from Feng, Amy Yan, a Cyprus migration consultant has already made some deals. "The investors are bolder than we expected as Cyprus is not a conventional destination for emigration."
Mrs Lin, a visitor to the exposition, signed up for a real estate sales tour to Australia. She was considering purchasing a house for her child to live while going to college there. "It saves considerable amount of rent for my kid and could also be a good investment for us," Lin said.
A retiree surnamed Qiao signed up for a tour to New Zealand. "I am looking for a country of good health care system since my kids are away from me. Now I am considering New Zealand as a destination of emigration."
"The buying power of the investors have to find its channel after the government's implementation of tightening policies in real estate market," said Ding, "and if the housing price remains high, it is inevitable that more and more Chinese people will set their eyes on investment opportunities abroad."
Like Jin, many of the over 200 attendees of the tour are considering to buy a new house after the sign of lowering prices indicated.
"Though high-end real estates of around 60,000 yuan (US$9,390) per square meter see their prices stable; developers of cheaper real estates have started reconsidering their prices. Several have already taken the lead to offer discounts," said Ding Jiangang, an editor of Zhejiang Online's property section.
Hangzhou's residential properties have long been criticized as overpriced. According to the China Real Estate Index System, the real estate price of Hangzhou in August was ranked the second in the Chinese mainland with an average price of 20,959 yuan per square meter. The price is almost on the same level with the top-ranking city Beijing (21,202 yuan per square meter) but much higher than Shanghai (14,987 yuan per square meter). However, the average housing price in Hangzhou has already dropped by 9 percent in August compared with July.
Due to the vibrant private sector in Zhejiang, people from cities around Hangzhou have been flooded the province's capital with their investment in the real estate market causing complaints from local residents who want to buy an apartment.
The central and local governments on the other hand are bidding to change the situation by implementing policies to clamp down on property speculation and runaway prices. Followed by the guidelines issued by the State Council in January this year, Hangzhou government released its policies for real estate market in March including refusing bank mortgages to buyers of three or more homes and building affordable houses.
On August 3, the Hangzhou Housing Management Bureau stopped the popular practice among property developers that gives consumers some discount after certain amount of pre-payment.
The land transfer rate shows no signs of backing down. In August, the land transfer rate for residential properties still went up after a dramatic doubling in July indicating strong confidence of developers. On the other hand, the housing stock in Hangzhou has reached record high. Until September 24, over 22,000 residential properties were reported in stock.
"It is still too early to tell whether the price has reached its bottom as we are not sure whether the government's tightening policies will change," said Ding. "My suggestions for the buyers are to look carefully at the apartment they would like to buy and be prepared for its devaluation if they are not buying the house for investment."
Some real estate developers, however, say the home price has already touched their bottom line.
"We got the land for 10,000 yuan per square meter and now we are selling the houses at 16,600 yuan per square meter on average. It is almost our cost," said Ni Wuying, deputy manager of Sunshine Garden, a residential community project.
"It is hard to sell houses now as the price is changing and the consumers' anticipations are unstable. That is why many real estate developers are waiting till next month or even later to start selling," said Ding.
While the market still remains unpredictable for buyers, investors of high-end real estate have found a new way out for their money.
On Saturday, the first Hangzhou Overseas Real Estate Exposition kicked out. The three-day exposition offered a choice of not only real estates across the world for investment but also in some cases emigration.
"Hangzhou is a new market and we are just doing some market tests and promotion this time," said Feng Chong, employee of a Sweden real estate developer.
Different from Feng, Amy Yan, a Cyprus migration consultant has already made some deals. "The investors are bolder than we expected as Cyprus is not a conventional destination for emigration."
Mrs Lin, a visitor to the exposition, signed up for a real estate sales tour to Australia. She was considering purchasing a house for her child to live while going to college there. "It saves considerable amount of rent for my kid and could also be a good investment for us," Lin said.
A retiree surnamed Qiao signed up for a tour to New Zealand. "I am looking for a country of good health care system since my kids are away from me. Now I am considering New Zealand as a destination of emigration."
"The buying power of the investors have to find its channel after the government's implementation of tightening policies in real estate market," said Ding, "and if the housing price remains high, it is inevitable that more and more Chinese people will set their eyes on investment opportunities abroad."
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
