Zhangjiajie in the bubble: there are many unfinished buildings

Opportunities have created Zhangjiajie’s tourism industry and also allowed its real estate industry to flourish. However, as China's economy enters a period of adjustment, real estate inventories are generally high in third- and fourth-tier cities. Zhangjiajie, Hunan is no exception. From 2013 to the present, the "wonder" that people can see is that dozens of unfinished real estate projects have been left unfinished, developers have run away, and owners have continued disputes.

"The vacancy rate is too high. The North Railway Station and Dayong Bridge projects are almost turning into ghost towns. The previous tourism real estate concept has basically failed." A real estate industry insider in Zhangjiajie told reporters . During the investigation, the reporter found that there are many unfinished real estate projects in Zhangjiajie urban area. Dozens of real estate projects such as Sunshine Waterfront, Times Harbor, Xincheng Juntai, Moon Bay, New Bund 26°, and Huatian City have become "problem real estate" to varying degrees.

From “the city is full of excavators” to being full of unfinished buildings

Opportunities have created Zhangjiajie’s tourism industry and allowed tourism real estate to flourish. In the few years since 2006, real estate developers have been enclosing and developing land in this "paradise land". For a time, "the city was full of excavators", there were many buildings inside and outside the city, and real estate advertisements were overwhelming.

However, as China's economy entered a period of adjustment starting in 2012, real estate inventory in third- and fourth-tier cities generally remained high. Zhangjiajie is no exception. Since 2013, the market has entered a freezing period.

The blindly launched real estate development encountered the "domino effect" of shrinking demand, resulting in an oversupply of housing in Zhangjiajie urban area and obvious signs of a bubble bursting.

From 2013 to the present, the "miracle" that people can see is that dozens of unfinished real estate projects are in ruins, developers have run away, and owners have constant disputes.

According to a real estate industry report, Zhangjiajie’s supply-demand ratio is 246.7%, which is a serious surplus and ranks third among 70 cities in the country.

The market fell off a cliff: it will take 21 months to destock

According to data from the Zhangjiajie Municipal People’s Government website, the city’s commercial housing for sale area was 680,800 square meters, a year-on-year increase of 5.5%, of which residential The area for sale was 546,400 square meters, a year-on-year increase of 52.8%.

At the same time, the decline in sales area and sales amount of commercial housing in Zhangjiajie City is intensifying. From January to November 2015, the sales area of ??commercial housing was 419,500 square meters, a year-on-year decrease of 15.6%, and the sales amount was 1.55 billion yuan, a year-on-year decrease of 32.5%.

Commercial housing sales have declined, while the area for sale has increased, putting Zhangjiajie’s real estate inventory under “great pressure.”

A staff member of the Zhangjiajie City Housing Authority said in an interview with reporters, "According to the current planned monthly sales volume of 110,000 square meters, it will take 21 months to destock."

It is still unknown what measures the government will take to digest the inventory.

Case 1 The Oriental Pearl Tower was sold for only 20% and the developer has been blacklisted

The Oriental Pearl Tower is one of the largest unfinished projects in Zhangjiajie urban area.

On March 9, under the guidance of insiders, reporters came to the Fortune Sunshine Trade City complex project located on the Lishui River at the intersection of Yongding Avenue and Zhanqian Road in Xixiping, Yongding District, Zhangjiajie City.

Mr. Zhang, the owner, introduced to reporters that the Oriental Pearl Community is the first phase of the Yongding Fortune Sunshine Trade City. Construction started at the end of 2011. At that time, according to the commitment of Shixiong Real Estate Development Co., Ltd., the entire residential complex would be completed by the end of 2012. The construction of the main project of the community, the roofing project and the internal and external painting project, the sewage pipelines of the supporting projects, the hardening of roads in the area, greening, lighting and other projects will all be completed and accepted and delivered for use by the end of February 2013.

However, the reality is skinny. "The construction of the community has not been carried out as scheduled, and the delivery time has been delayed many times. As of March 2016, the real estate developer has not been able to deliver the property on time, and has refused to fulfill its liability for breach of contract as stipulated in the contract." Mr. Zhang said.

A person in the local real estate industry told reporters: "On the surface, the problems faced by Shixiong Real Estate Company are due to declining sales, improper internal management, and a serious imbalance in the ratio of construction funds and withdrawn funds. The project suffered from a series of problems such as late delivery and poor construction. The fundamental problem was that the developer lacked the necessary assessment of the real estate market, was too optimistic, and invested rashly, which ultimately led to the failure of the project and the lack of practical ability to resolve risks. ”

The information obtained by the reporter from relevant local government departments supports the person's judgment.

When the reporter checked relevant government information, he found that Shixiong Real Estate Development Company was listed in the tax arrears announcement issued by the Zhangjiajie City Local Taxation Bureau in the second quarter of 2015, with a tax arrears balance of more than 6.4 million. Yuan and was blacklisted due to bad credit. In addition, the company was included in the social stability risk assessment project of major events in 2015 by the Zhangjiajie City Housing Authority and reported to the Municipal Stability Maintenance Office.

Case 2 Guihuayuan developer ran away with debts and left the building empty

From March 9th to 10th, the People’s Court of Yongding District, Zhangjiajie City summoned the owners of Guihuayuan Community for two consecutive days to coordinate meeting to resolve the issue of closing costs for unfinished projects.

However, the owners did not reach an agreement at the meeting, and the coordination meeting was fruitless again.

Guihuayuan Community is a famous unfinished building community in Zhangjiajie city. It is located at the intersection of Dingtai Road and Bada Road in Zhangjiajie. It covers an area of ??more than 30,000 square meters and a construction area of ??about 100,000 square meters. , with a total number of 770 households, and the developer is Zhangjiajie Mingqiang Real Estate Co., Ltd.

At present, 452 units of this project have been sold, and there are still 246 units unsold. However, because the developer owner Zheng Yongming "ran away" due to financial problems in 2013, the project has been unfinished for more than 2 years. The community has been sealed by judicial authorities. Up to now, although the main project of the community has been completed, water, electricity, gas and other parts have also been installed in the final phase, and the house has been handed over to the owner in May 2014. However, the roads, greening, drainage, underground garage, security, and fire protection in the community , elevators and other infrastructure projects have not yet been completed, and the occupancy rate is less than 30%.

According to an insider who participated in the Yongding District People’s Court Coordination Meeting, the reason why the Guihua Garden project was unfinished was that the developer Mingqiang Real Estate Co., Ltd. misappropriated the sales proceeds and failed to invest in other places, and the foreign debt was owed as much as 160 million yuan.

According to the owners of Guihua Garden, the house purchase contract in this community stipulated that the delivery time was October 31, 2013. The developer postponed the handover to December 31, 2013. On the day of handover, the owners discovered that the developer and Its sales department is already empty. In desperation, more than 400 owners petitioned collectively. After repeated coordination by government departments, at the end of May 2014, the developer had to hand over the sold houses to the owners.

The aforementioned insider said that in addition to being affected by the overall real estate market, the reason why Guihuayuan Community was unfinished was also due to the lack of supervision by the regulatory authorities.

According to "China Real Estate News"