2016-05-29

Chinese Developers Bet Life of Land Purchases, Govt Ready For Crackdown

With debt ratios climbing to an average of 96 percent in 2015, developers are said to be better their lives on land.
Housing Association reports that listed room rate falling profits, high debt. 2015 Housing prices listed average net profit 15.94 billion yuan, up 6.14 percent, but the return on equity and return on total assets average of two indicators continue to decline, since 2009 is still in the lowest point. In addition, the real estate industry in 2015 debt levels remain high. Average net debt ratio 96.09%, compared with 2014 increased by 7.23 percent, a new high.
Analysts wonder how developers will turn a profit when their land purchases have already priced in a 50 percent gain in home prices:
According to real estate industry sources, the Department of Housing and May 25 convened a veteran real estate sector, and heard one of the content, is king of the recent frequent impact on the future of the property market. Some analysts believe that the local government time to implement the new regulatory policy should be getting closer. "Some hot second-tier cities, such as the control tone Hefei, Suzhou, Nanjing, Xiamen and other cities will soon change." Property analysts believe that with the policy.

If suppress the second-tier property market policies, such as Dawei predict such price gains next year can not exceed 50 percent, how has got the king's companies will fill the cost? Market participants expressed concern about the risk of future housing prices.
iFeng: 上市房企去年负债率达96% 今年“赌命”争地王

Soaring second-tier land prices have caught the attention of high level government officials:
The hot second-tier property market is facing a turning point in the property market policies. This year has appeared 152 land kings, most of the hot spots in second-tier cities, Suzhou , Nanjing has land have introduced price-cap policy to curb the king. Recently, the Ministry of Housing listened to the real estate sector report on the status of the property market, focusing on hot spots of the city to the king. After the market came news of Hefei in June is expected to re-introduction of restriction policy, Suzhou there may be an alternate regulatory scheme.
Suzhou and Nanjing have already rolled out policies, and other cities are drafting rules:
Hefei is also hot property market reserve policy responses. It is understood that the purchase of policy Hefei nine regions has recently completed the drafting, execution or purchase transaction filing time prevail. Hefei aspect outgoing messages, particularly when the introduction of restriction, the last approved by the municipal government and other, and after the purchase of policies, is expected to limit the loan policy will be followed.
The central government is watching:
Second-tier cities housing prices overheating, has attracted the close attention of the central government. There are real estate industry sources, the Department of Housing and May 25 convened a meeting with veterans of the real estate sector, and the discussion included the recent frequent appearance of land kings and the impact on the future of the property market.

...Some analysts believe that the local government time to implement the new regulatory policy should be getting closer. "Some hot second-tier cities, such as the control tone Hefei, Suzhou, Nanjing, Xiamen and other cities will soon change."

iFeng: 地王引高层关注:住建部听取汇报 楼市政策或收紧

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