2024-08-07
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Reporter of Meijing: Chen Li Editor of Meijing: Chen Mengyu
Price reduction sales have become a common phenomenon in Wuhan's real estate market.
According to China Business News, the original registered price of the Wanhe Optics Valley project located in Wuhan Optics Valley was about 23,000 yuan/square meter, and the recent sales price has reached 12,500 yuan/square meter, which even triggered discussions from the outside world about Wuhan's cancellation of the price limit for new homes.
On August 6, Wuhan Housing and Urban Renewal Bureau said in an interview with the media that the price of commercial housing is determined by the enterprise according to market conditions, and the sales plan needs to be filed with the relevant departments. The sales price does not exceed the registered price. "Wuhan has not issued relevant policies to limit the decline in housing prices. It is up to the developers to decide."
In fact, it is not just Wanhe Optics Valley. The reporter from "Daily Economic News" learned that many projects including Greentown Huangpu Bay and Jinchuan Pure Waterside have recently been significantly reduced in price for sales, and some real estate projects were even directly closed after price cuts failed.
"At present, the overall market in Wuhan is still bottoming out. Many projects have reduced their prices, but there is still no improvement."
A relevant person in charge of the Wuhan region of a national real estate company said that the problem is mainly on the demand side, and changes on the supply side are not very significant.
Wuhan Nanshan Jinchen is operated by Nanshan Real Estate.
On a third-party platform, channel broker Xiao Zhang told the "Daily Economic News" reporter that the Nanshan Jinchen project was registered and obtained evidence in early 2022. At that time, the average price of fine decoration reached 30,000 yuan/square meter. It was also the first high-rise residential project outside the third ring road of Optics Valley to exceed the registration price of 30,000 yuan per square meter.
However, "there is a relative lack of educational, commercial and other supporting facilities around the project, and sales have been unsatisfactory. In July of that year, the project was changed from a fine-decorated project to an unfinished project and re-registered. The average registered price of the unfinished project became 27,000 yuan per square meter, and the discounted unit price was adjusted to 22,000 to 23,500 yuan per square meter." Xiao Zhang told reporters, but the actual price was even lower during the sales process.
Public information shows that in June 2021, in the first batch of centralized land supply in Wuhan, Nanshan Real Estate won the P36 plot with a total price of 730 million yuan, a premium rate of 100%, and a floor price of 15,985.65 yuan/square meter after 129 bids. It is now Nanshan Jinchen. The project is planned to have only 3 residential buildings with a total of 449 households.
"The project was previously named Nanshan Yuefu. It was closed in the first half of 2023 due to unsatisfactory sales. In the second half of that year, the project was renamed and repackaged and put on the market. No price adjustment was made at that time."
Despite this, the project's sales are still not optimistic. During the May Day holiday this year, the project also launched special price houses, the unit price of which was lower than the floor price of the land at that time, less than 15,000 yuan per square meter.
According to Wufangtong data, the project obtained pre-sale certificates twice: 240 units obtained the certificate in July 2022, but only 65 units of this batch have been sold to date, with a sales rate of 27%. The 124 units that obtained the certificate on July 4 this year had a price of 22,849 yuan/square meter, a decrease of 4,151 yuan/square meter from the previous batch of 27,000 yuan/square meter, and no sales records have been made so far.
"The project has been closed again." As for when sales will be restarted, Xiao Zhang said, "I have not received any notification yet."
Selling at a lower price has become a common choice for real estate developers in Wuhan.
For example, the certificate price of Gemdale International City on July 26 this year was 9,231 yuan/square meter, which was 5,980 yuan/square meter lower than the previous batch of 15,211 yuan/square meter; the price of Greentown Wuhan Huangpu Bay was 45,604 yuan/square meter, which was also reduced by more than 5,000 yuan/square meter compared with the previous batch; the price of Jinyue Mansion in Financial Street was reduced by 2,499 yuan/square meter.
In addition, the recent certification price reductions for many projects such as Hong Kong Land·Jindi Fengjing, Wuhan Urban Construction·Tianyue, and China Overseas Universe have all exceeded RMB 1,000 per square meter.
The aforementioned relevant person in charge said that compared with the rigid demand projects, high-end improvement projects are doing better.
A relevant person in charge of the central China region of another real estate developer also said that sales of his company's projects in Wuhan have dropped significantly this year, and some of its projects have had to cut prices, but the company is particularly cautious about price adjustments for high-end projects, mainly out of concern for a backlash in owner sentiment.
Since the beginning of this year, the price of new houses in Wuhan has continued to fall.
Data from the National Bureau of Statistics show that from January to June this year, the prices of new homes in Wuhan fell by 0.6%, 0.5%, 0.8%, 1.0%, 1.5% and 1.1% month-on-month respectively. This is the 12th consecutive month that the prices of new homes in Wuhan have fallen. Year-on-year, as of June 2024, the prices of new homes in Wuhan have fallen by 7.9% year-on-year, marking more than 20 consecutive declines.
According to CRIC statistics, the average monthly visits to a single project in Wuhan in July were 182 times, 9 units were subscribed, and the average subscription rate was 4.9%. The visit and conversion rates have fallen for three consecutive months, and the overall level in July was the same as in April; the visit and conversion rate thresholds for the TOP20 projects dropped to 8.3%, a month-on-month decrease of 2.6%. The China Railway Yijingwan and OCT Red Square, which ranked at the top in terms of visit volume and conversion rate, achieved this through price strategy optimization.
"Project discount sales have become a common thing." CRIC analysis pointed out that based on the registered price, the sales price of new homes in Wuhan has continued to decline since the 97% discount in 2021. As of the first half of this year, the comprehensive discount rate of Wuhan's saleable value was 84%. "Except for Optics Valley, the average transaction price outside the Third Ring Road is mostly below 80% of the registered price, and even 70% outside the city, such as outside the Fourth Ring Road."
"The new supply in the second half of the year is expected to be no more than 4 million square meters, and no more than 7 million square meters for the whole year." CRIC analysis pointed out that the decline in supply is still due to poor sales. "The new supply sales rate in the first half of the year was as low as 18%."
Daily Economic News
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