Sina Property News (Editor He Ting) - Purchase restrictions dealt a heavy blow to Beijing's property market. Following the record low sales of new projects in Beijing in July, the property market continued to experience sluggish sales in August. According to the latest data from the Beijing Real Estate Transaction Management Network, from August 1st to August 21st, only 11 new projects in the Beijing market obtained pre-sale permits, with only 3,836 units approved for sale. Among these, nine projects reported zero sales.
Regarding the zero-sales projects, Zhang Dawei, Director of Research at Beijing Centaline Property's Secondary Market, stated that some projects might not have had time to complete online signing procedures, and thus, relevant data was not reflected on the Beijing Real Estate Transaction Management Network. However, there are also some projects that genuinely did not sell a single unit.
According to statistics by Sina Leju, in 2011, nearly 30 projects in Beijing saw less than ten units sold in half a year. Most of these projects were located in the distant suburbs, but there were also downtown projects like Tianrun Fuxi Avenue. Facing deep stagnation in the property market, developers became increasingly cautious about launching new projects, and the traditional "Golden September and Silver October" might become a thing of the past.
It is worth noting that all the zero-sales projects in August were located in far suburban areas such as Tongzhou, Fangshan, and Daxing. Examples include Zhonghai Jiuhao Courtyard in Fengtai, Huafu Manor and Jianbang Jiayuan in Fangshan, and Yudongyuan Residential Area in Miyun. Since January 2011, nearly 30 real estate projects with fewer than ten units sold were mostly located in the far suburbs like Tongzhou, Fengtai, Shunyi, and Miyun. Some of these projects have already started price cuts and promotional sales.
Tianrun Fuxi Avenue, however, was the only downtown project with poor sales performance. On June 26th, Building C3 of Tianrun Fuxi Avenue obtained its pre-sale permit. This was the first time new units were launched after Buildings C5 and C7 opened in July 2010. A total of 162 units were offered this time, and many media outlets reported that the on-site sales were booming. When Sina Leju called the sales office, the salesperson claimed that more than half of the units were sold, and the sales control board at the office showed a high level of red indicators.
However, investigations by Leju revealed that as of August 21st, the online signing data for this project on the Beijing Real Estate Transaction Management Network showed only six units sold. It was understood that when Tianrun Fuxi Avenue first opened in 2010, the selling price was only 18,000 yuan per square meter. By December of last year, the average selling price had risen to 25,500 yuan per square meter, and by June it had further increased to around 30,000 yuan per square meter. In the face of stringent property market regulations and sales difficulties, instead of lowering prices, they continued to rise. However, the nearby CR International City maintained an average price of around 20,000 yuan per square meter, while Huamao City LOFT apartments averaged 27,000 yuan per square meter. Clearly, Tianrun's pricing lacked competitiveness in the Beiyuan area.
An insider revealed that the poor sales performance of the project was due to unreasonable planning: the N Zone currently on sale is mixed with relocation housing, significantly affecting living quality. This project is also the closest one among the five projects in Beiyuan to high-voltage power lines. The overall design and materials used in the project are inferior to those of Huamao City. Records show that when Tianrun Fuxi Avenue acquired the land in 2007, the floor price was only 4,679 yuan per square meter. Today, the housing price has reached 30,000 yuan per square meter, representing an unimaginable increase over three years.
This article is reprinted from Beijing Real Estate http://bj.house.sina.com.cn