01 price of competitive housing in some regions fell by 20%
Photo by Xue Yufei, new longitude and latitude, a building under construction in Chaoyang District, Beijing
After working in Beijing for many years, in August 2018, Tongling (not her real name) bought a house of xuhuicheng project in Fangshan District with the collected down payment. With some miscellaneous expenses, the average price of the house was close to 39000 yuan / m2.
When buying a house, Xu Huichengs real estate consultant told Tong Ling that this is the first batch of pre-sale license limited competitive housing projects in Beijing. The average sales price of this batch of houses approved by the housing and construction department is 38994 yuan / m2, which is very suitable. Tong Ling doesnt know much about competitive housing. Her understanding is that the government has helped the people hold down the price. Its more cost-effective to buy this kind of project.
Limited competitive housing, i.e. limited house price and competitive land price, sets the sales price of future commercial housing when the land bidding is hung. When the land bidding price reaches the upper limit, the developer will bid for the proportion of self holding and the area of public rental housing. At the same time, the buyer shall not be listed for trading within five years after acquiring the property right of the project. That is to say, the government has set up the red line of the highest price of the non competitive housing project, which the developers can not exceed, but there is no limit to the downward fluctuation. This kind of house is still a commodity house, not a security house.
With the emergence of the emphasis on control effect, the Beijing real estate market has declined, and the linkage price reduction of new and second-hand houses has become a trend, and the xuhuicheng project located outside the sixth ring road has also been affected. Tong Ling told Zhongxin Jingwei (wechat: jwview) that now the price of Xuhui city has dropped by about 5000 yuan / square meter, and she has lost more than 300000 yuan. Since the pre-sale certificate was obtained in June 2018, Xuhui city has not been sold out. According to the anjuke client, the lowest price of the property is 32500 yuan / m2.
The sales are not ideal, which is a problem that most of Beijings competitive housing projects need to face. Zhang Dawei, chief analyst of Zhongyuan Real estate, told Zhongxin Jingwei: there are about 58700 residential units in the 128 phase and 78 non competitive housing projects that have entered the market, but now there are about 24800 online signing units, accounting for only 42.7%. In addition to a small number of real estate projects, it is excellent to be able to sell more than half of them.
According to the statistics of Zhongyuan Real Estate Research Center, although the turnover of new commercial residential buildings in Beijing in 2019 increased by 57% year on year, the inventory of commercial residential buildings reached 80000 sets in 2018 and 2019, the highest record in the last eight years.
The high inventory of new commercial residential buildings is related to the sharp increase in the supply of competitive housing. Since 2018, Beijing has supplied a total of 95000 new homes, of which 54400 are non competitive, accounting for 68% of the market supply, the agency said. There is also a large backlog of non competition housing projects, with an accumulated inventory of 33800 units.
Zhongxin Jingwei noted that under the double squeeze of poor sales and increased supply, except for a few well located and well-equipped limited competition housing projects that sell residential buildings at the maximum price, the actual price of most of the buildings has a certain space with the maximum price, similar to the price reduction action of Xuhui City, which is not uncommon in other buildings.
Beijings limited competition houses are obviously clustered in Qinglonghu, Yizhuang, Daxing and other areas. In this case, although the planning and design of most of the projects are improved compared with the previous ones, the market is likely to have a price war under the requirement of capital return. According to Zhang Dawei, the price of competitive housing in some regions has dropped by more than 20%.
02 most projects will lose money
Of the 66 blocks of restricted competitive housing that have entered the market (some projects belong to multiple blocks), 46 have a price difference of less than 20000 yuan / m2. Currently, only 8 of these projects are basically sold out, and the other 4 projects are basically guaranteed. On the whole, 80% of Beijings competitive housing projects have lost money. Even if they are sold out quickly in the future, they will only reduce their losses. If the price war continues, the loss will expand. The research center said.
Kerry research center also said at the end of October 2019 that statistical analysis on the operation of 86 plots including residential land clinched in 2016 and 2017 in Beijing found that only 30% of the 66 projects that had opened were surplus, and more than 70% of the projects were facing losses. In the limited competition rooms, the price difference between Xicheng Tianzhu, jinchenfu, yijingwanhe, xiruichunqiu, Beijing Lingxiu and Guancheng villa is about 17423 yuan / square meter, 14975 yuan / square meter, 8348 yuan / square meter, 7652 yuan / square meter, 6926 yuan / square meter and 3742 yuan / square meter respectively, all of which will suffer losses.
Yan Yuejin, research director of think tank center of Yiju Research Institute, made an analysis of China Singapore economy and latitude. Generally, the land price accounts for 30% of the house price, and then the construction and installation, marketing, tax and other costs are taken away, so the project can be profitable. Now, the proportion of land price of many competitive houses in Beijing is too high, which is an important reason for the loss.
Zhang Dawei said that the gap between the house price and the land price is small. Developers already know when they take the land. The reason why they dare to take the land at a high price is that they have a better expectation of the market in the future. When the early batch of auction restricted real estate plots are sold, the market is still hot, the developers are relatively optimistic, and the underground goods value of the project is estimated to be high. At the same time, due to the low price of auction restricted real estate, the developers think that the project will realize rapid decentralization, and the financial cost is also low, which can achieve profits. But as the market goes down, sales become slow, underground goods are difficult to sell at high prices, and profits are slowly swallowed up by financing costs.
Chen Xiao, an analyst at Zhuge housing data research center, said that compared with the unlimited price commercial housing, the price of the limited competition housing project is relatively low. The construction cost, financial management expense, marketing expense, various taxes and fees and other expenses account for about 30% of the price of the house, and the profit space of the developers is compressed. At the same time, there are some disadvantages in the limited competition housing project, such as serious homogenization and remote location, which lead to poor decentralization and more difficult profitability.
03 house quality becomes a hidden worry
Previously, some insiders pointed out that the quality of houses delivered in recent two years is generally poor. Try not to buy new houses in these years. As far as Beijings real estate market is concerned in the past two years, both high-end luxury houses and indemnificatory houses have project quality problems.
In September 2018, China Resources Kunlun District broke through the red line of 80000 yuan / m2 price limit and its average sales price reached 95000 yuan / m2, which caused a lot of attention. Some analysts believe that although China Resources Kunlun district has broken the red line of housing price limit in Beijing, compared with the 120000 yuan / m2 second-hand houses in the surrounding area at that time, the price is still low, the profit level is not high and even fall into a loss, which may be the reason for the discount of quality.
In June 2018, Beijing issued the first batch of pre-sale certificates of non competitive housing. According to the construction cycle, this year and next year will be the centralized delivery period of non competitive housing projects. According to Zhang Dawei, the first batch of auction restricted housing projects will be delivered in March 2020, with about 20 projects delivered this year and 50-60 in 2021. In the case that 80% of the auction houses will lose money, can the housing quality be guaranteed?
According to Chen Xiao, high prices have compressed the profit space of real estate enterprises, and fast turnover has become an inevitable choice, which may cause hidden worries about housing quality. Yan Yuejin believes that low profits or even losses may not necessarily cause housing quality problems, but objectively speaking, some enterprises do have the impulse to cut production and materials, and the possibility of reducing distribution exists.
Zhang Dawei said that the enterprises are unprofitable, leaving a lot of quality risks to the limited competition housing projects, and the probability of quality problems in future delivered projects has increased. In the rising stage of house prices, the earlier the buyers buy, the more likely they will earn. Even if there are quality defects, they will not be very concerned. But now its different. The price of non competitive housing has not risen, but has fallen. At this time, if there is another quality problem in the housing, it will lead to a rebound of buyers, and the small problem will become a big contradiction.
Zhang Dawei suggested that when purchasing houses in the future, the project with certain space between house price and land price should be properly considered, which will reduce the probability of quality problems. In fact, with the Beijing real estate market entering into a downturn, the premium rate of the subsequent re-entry restricted real estate plots has been reduced. Zhang Dawei said that it is expected that the loss side of these projects may be reduced, but the competition in the restricted real estate market is still fierce. From the end of 2019 to now, Beijing has successively sold many open-ended plots. Chen Xiao believes that the transfer of open-ended plots is a policy fine-tuning in line with the current situation of market development, to some extent, it can improve the enthusiasm of real estate enterprises in land acquisition, and it is a good thing for enterprises to make profits. Yan Yuejin said that the limited competition housing will not exit the market temporarily, but needs further optimization and adjustment. Source: Zhongxin Jingwei editor in charge: Yang Qian, nf4425
Zhang Dawei suggested that when purchasing houses in the future, the project with certain space between house price and land price should be properly considered, which will reduce the probability of quality problems.
In fact, with the Beijing real estate market entering into a downturn, the premium rate of the subsequent re-entry restricted real estate plots has been reduced. Zhang Dawei said that it is expected that the loss side of these projects may be reduced, but the competition in the restricted real estate market is still fierce.
From the end of 2019 to now, Beijing has successively sold many open-ended plots. Chen Xiao believes that the transfer of open-ended plots is a policy fine-tuning in line with the current situation of market development, to some extent, it can improve the enthusiasm of real estate enterprises in land acquisition, and it is a good thing for enterprises to make profits. Yan Yuejin said that the limited competition housing will not exit the market temporarily, but needs further optimization and adjustment.