Last year in the middle of the year, Yang Xin (a pseudonym) had his eye on a residential project called Tian Shan Huating in Changning District, Shanghai. At that time, he heard that the project would launch at the beginning of 2008. After New Year's Day, he made no less than ten phone calls to the sales office asking for updates, but the sales staff kept postponing the launch date from January to February, and then from February to March. Yesterday, when he called the sales office again, he was told that the launch would be at the end of March or early April. [Related reading: New tactics for withholding properties: forcing employees to borrow money to buy houses and wait for prices to rise before selling.]
Many homebuyers are encountering the same issue. According to incomplete statistics collected by the Morning Post from Youwei Real Estate Research Center, Focus Real Estate Network, and the market, at least 16 new residential projects have delayed their launches since the beginning of this year. The number of delayed launches even exceeds the number of new residential projects launched in February.
Investigation by the Morning Post revealed that residential projects such as Shanghai ONE City (InTown), Phase II of Kaisin Garden, Phase III of Waterfront Blue Bridge (Yupin Waterfront), and Deerport Lane, which were originally expected to launch at the beginning of this year, have yet to hit the market.
Under normal circumstances, real estate projects usually start promoting three months before the launch and announce the sales date through advertisements. Youwei Real Estate and Focus Real Estate Network found that at least 16 projects postponed their launch dates from the beginning of the year to March, April, or even later.
In normal situations, about 150 to 200 new projects are launched each month in Shanghai, with approximately 50 being residential projects. However, in February this year, the number of new projects launched in Shanghai touched the lowest level since 2005, with only 31 new projects launched, including just 13 residential projects, according to Jianxiong Xue, director of the Youwei Real Estate Research Center.
Based on these figures, the number of residential projects launched in February is even fewer than the number of residential projects that have been postponed since the beginning of the year.
An analyst from Focus Real Estate Network who wished to remain anonymous believed that the main reason for developers delaying their launches recently is due to the sluggish sales and观望market sentiment starting from last year, causing developers to worry about poor sales after launching and facing pricing pressures later.
He also mentioned that the promotional activities by Vanke in Shanghai during the Lantern Festival was another reason for some developers delaying their launches. Many developers feared that Vanke's discounts might create an expectation among buyers that housing prices would drop, thereby affecting the speed of new home sales.
However, Jianxiong Xue from Youwei Real Estate Research Center believed that Vanke's one-day discount during the Lantern Festival resulted in the sale of seventy percent of its units, indicating that market demand remains strong. This has led most developers to still be optimistic about the future market. He suggested that many developers believe that as long as they withhold their properties through this period of observation, prices will rise again.
Xue believed that the main purpose of most developers delaying their launches is actually waiting for the market to warm up again and for housing prices to continue rising.