Nanjing's real estate market in the area north of the Yangtze River was suddenly hit by price cuts yesterday. This area, known for its super-sized developments and consistently high levels of development and sales volume in Nanjing, made a sudden move yesterday. Following the Xuri Shangcheng development’s offering of more than 300 units at a fixed price of 4500 yuan/square meter, Suning Properties launched a similar pricing strategy for its three developments in Qiaobei: the Tianrun Cheng development offered 350 units at a fixed price of 4088 yuan/square meter, which is around 600 yuan/square meter cheaper than before.
The continuous discount promotions in the Qiaobei developments raise questions: does this collective price drop indicate that property prices in the area north of the river cannot hold up anymore? Is this a harbinger of an overall decline in Nanjing's property prices?
[Price Drop] Three developments offer fixed-price units
The super-large Tianrun Cheng development has thrown out an astonishing promotion with a fixed price of 4088 yuan/square meter, offering 350 special-priced units spread across different sections of the development.
Coincidentally, two other developments in the same Jiangbei sector, specifically in the Qiaobei area, also adopted a fixed-price strategy: Venetian Water City offered 150 units at a uniform price of 4480 yuan/square meter, while Tianhua Lügu offered 50 units at a uniform price of 4188 yuan/square meter. However, it was reported that these developments imposed strict restrictions on the floors available for purchase. For example, one development only targeted ground and top-floor units, while another limited the selection to floors 1-6 of high-rise buildings, and the first and sixth floors of low-rise buildings.
In total, 550 special-priced units account for what percentage of the available units for sale? According to data from Nanjing Online Real Estate, these three developments currently have a total of 3360 units available for sale, meaning the 550 special-priced units make up about 16% of the total available units.
An industry insider stated that for a major player like Suning in Qiaobei, 550 units spread across three developments might seem trivial, but considering the current total number of available units, a 16% proportion is relatively significant.
Sold to specific groups? Sales offices say anyone can buy
Interestingly, Suning Properties’ official statement yesterday was that these 550 units across the three developments were specially selected to thank society and demonstrate social and cultural care, targeting provincial and municipal model workers, advanced workers, soldiers, and others who have contributed to society.
However, when reporters contacted these three developments yesterday, the sales staff all said there were no such restrictions, and buyers could purchase normally.
Why is the developer being so secretive? An industry insider speculated that the developer might be worried that previous buyers would feel they had bought at a loss and demand refunds or compensation.
[Citizen Reactions] Both those who want to buy and those who don't have their reasons
Citizen Mr. Shi stated that if the fixed-price discounts only applied to ground and top-floor units, it wouldn’t mean much. But he noticed that some fixed-price units weren’t just for ground and top floors; for instance, one development included floors 1-6 of high-rise buildings, making units on the 4th and 5th floors priced at 4480 yuan/square meter worth considering.
Mr. Shi also believed that compared to the prices he had been tracking, these fixed-price units were several hundred yuan cheaper per square meter, with hundreds of units available. The scope of the price reduction was quite broad, so he decided to check out the properties over the weekend.
But there are also citizens who are indifferent to the price drops in Jiangbei developments. Ms. Lu said that she recently took a bus to view properties in Jiangbei but got stuck in traffic for over two hours on the bridge. By the time she reached the development, she had lost all enthusiasm. With such poor transportation conditions, living there in the future would be too inconvenient. Although prices have dropped significantly, she remains hesitant and doesn't plan to consider buying in Jiangbei for now.
[Industry Analysis] Qiaobei's dream of reaching five thousand yuan per square meter shattered
Developments in the area north of the river last year aimed to break through five thousand yuan per square meter, but it seems they've been brought back down to earth. Shi Dong, vice president of Nanjing Wangshang Real Estate Research Institute, analyzed that from a transaction average price of less than 3500 yuan/square meter in February last year to struggling to maintain at 4500 yuan/square meter now, breaking through five thousand yuan per square meter clearly failed.
This can also be seen from the comparison of sales volumes during the same period: in February this year, the sales volume of Pukou developments dropped by 74% month-on-month, putting pressure on developers.
According to predictions from the Wangshang Real Estate Research Institute, this year, 3.313 million square meters of new commercial housing will be listed in the northern part of the river (slightly higher than the 3.21 million square meters in 2007), including 2.865 million square meters of newly approved listings, the highest among all sectors in Nanjing. This year, the additional supply of residential properties from the 45 developments on sale in the northern part of the river will reach 2.8 million square meters. The concentrated and large-scale supply of commercial housing will inevitably intensify competition in the real estate market in the Qiaobei area of the northern part of the river.