Housing inventory in Beijing's Tongzhou totals 20,000 units

11:15, May 26, 2011      

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File photo. (By Xinhua)

Tongzhou District of Beijing, where housing prices were once close to that of Beijing's CBD area, has come to be an "outcast" of Beijing's housing market because of the adoption of the housing purchase restriction policies. It will take seven years to consume the 20,000 units of housing inventory in Tongzhou that are worth more than 10 billion yuan. The sharp decline in housing demand has caused real estate developers to adopt new pricing methods to postpone housing sales.

It will take seven years to consume the 20,000 units of housing inventory

The housing market in Tongzhou has become the hardest hit area of Beijing's housing market since the "10 national housing regulatory policies" were implemented in 2010. Data from the Beijing Real Estate Transaction Management Network shows that as of May 24, the number of pre-sales housing projects over the previous year stood at 30 with a total of 10,695 apartment units for sale, but the housing transaction volume stood at only 3,090 units, leaving more than 7,000 units of unsold apartments. The forward delivery housing inventory volume in Tongzhou stood at 14,501 units as of the end of October 2010.

Data from Beijing Centaline Property Consultants Company shows that the commercial housing inventory volume in Tongzhou has exceeded 20,000 units, raising its percentage to the city's total to nearly 30 percent and ranking first among all districts and counties of Beijing. If it is calculated according to the current annual housing transaction volume of 3,000 units, it will take seven years to consume these 20,000 units.

Real estate developers offer discounts

Artificially reducing housing supply was once an effective method used by real estate developers to sell apartments and withdraw funds as soon as possible, but recently-released polices on clearly marking the price of every pre-sale apartment stipulate that real estate developers must make a one-time announcement about their pre-sales housing supply volume, which will keep real estate developers from postponing housing sales at will.

Given the dull housing sales in Tongzhou district, developers who urgently need to recover their funds have thought of a new sales tactic to attract homebuyers. The Beijing Morning Post found that a pre-sale period was introduced at a community in Xiaojie Village, Liyuan Town, Tongzhou. Five residential buildings totaling 1,478 apartments in the community are all available for pre-order. As of May 24, 326 apartments have been pre-ordered, but strangely enough, all of the apartments pre-ordered are concentrated in one building, and none of the apartments in the other four buildings have been pre-ordered.

"Now, we focus on selling Building A4. The average price is between 16,000 yuan and 17,000 yuan per square meter, and buyers can enjoy a group purchase discount of up to 9 percent," said a housing salesperson. They are also selling the other four buildings, but do not offer any discounts except a 2 percent discount for lump-sum payments. The reporter pretended to be a homebuyer and asked the salesperson whether there were better discounts for the other buildings after all apartments in Building A4 are sold. The salesperson said, "It is possible. In fact, we may offer larger discounts when the majority of apartments in Building A4 are sold."

Housing prices in Tongzhou expected to drop in the near future

Zhang Dawei, director of market research at the Beijing-based Centaline Property Agency, said that after the third round of real-estate regulations, housing market speculation has largely disappeared in the city. Some price-sensitive homebuyers have turned their eyes to houses in Fangshan and other districts that have price advantages, so the demand for houses in Tongzhou has dropped sharply.

"Tongzhou's housing market is faced with the problem of over-saturation after years of hype and speculation. In the short term, most houses in the district will not be selling well, except a limited number of high-quality buildings," a market research institute under real estate service group 5i5j recently wrote in a report. The report noted that due to huge market pressure, housing prices in Tongzhou are expected to drop soon.

By People's Daily Online

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