Yesterday, we noted that the government of Wenzhou has put up 52 land plots for sale all in one go.? A sign of desperation, as government?s revenue fell amid slowing economy and weak real estate market.
Of course, this is not a unique phenomenon in Wenzhou.? On the whole, land sales revenue for the whole of China has fallen by 27.5% in the first half of the year compared to a year ago according to First Financial Daily, citing figures from the Ministry of Finance.? As almost 40% of provincial governments have been unable to reach their half-year budget target for the first half of the year, local governments are getting aggressive in putting up land plots on sale in hope to take advantage of the recently warmed-up real estate market and renewed interests from some real estate developers to ?buy the dip?, local governments put up land plots for sales as aggressively as they can.
Hangzhou, for instance, put up 7 land lots for sale on 27 August, raising about RMB5.4 billion of revenue according to First Financial Daily.? Meanwhile, Beijing is also putting up 11 land plots for sale on 17 September, and Shijiazhuang is putting up 8 plots according to the same report.
While local governments are hopeful that putting up more land plots for sale would help their finances, foreign real estate investors are getting more cautious.? We knew from earlier report on foreign direct investment that FDI in the real estate sector has fallen by 9.3% yoy for the first seven months of the year.? A grimmer picture came from National Bureau of Statistics, which says funding from foreign sources in real estate investment has fallen by 54.3% yoy for the first seven months of the year.?
China Securities Journal noted that Tishman Speyer, a real estate developer based in the United States is currently trying to sell one land plot in Shanghai which was acquired in 2008.? Many more other foreign real estate developers are cutting prices to sell off their inventory (with some owners that bought the apartments only months earlier getting angry, like this, perhaps).? On that note, we could go back to the recurring theme here that slowing capital inflow (and emergence of slow capital outflow) has already broken the old money creation mechanism.?
In any case, there is nothing to feel excited about.
For more news and analysis, visit Also sprach Analyst. Follow us on Twitter and Facebook.
Get our daily email update FOR FREE!
the shining mariano rivera mariano rivera jobs report tiger woods masters 2012 nikki haley stan van gundy
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.