Changzhou Dubbed the Second Ghost City; A Minefield of Oversupply

Changzhuo in Jiangsu province has been dubbed the second ghost city in China. The headline goes on to say there are buildings everywhere, but no cars. 常州房屋过剩已成“鬼城”第二 遍地只见住宅不见车辆

This headline blares: Developers flee Changzhou "minefield"
媒体：开发商逃离江苏常州等楼市“雷区”

In some real estate view, Changzhou belongs to the danger zone, there has been the problem of excessive supply. According to the same data show policy advisory body, Changzhou local property buyers just need customer satisfaction, in the past 13 months and 9 months of commercial housing oversupply. Over the past year, the average price of commercial housing turnover Changzhou widespread in 6000-7200 yuan / square meter, but in January 2014, the average price of commercial housing turnover Changzhou only 6009 yuan / square meter, a record low since last year.

Here will build a new "world-class" theme park, business district, etc., while still under construction subway. But among Changzhou Makeovers plan, the most ambitious to the number of its large number of residential projects. According to the "First Financial Daily" reported that, according to Changzhou, about 460 million of the total population, nearly four years, per capita Changzhou new construction area of ​​20 square meters, this value ranking in all domestic cities.

The mainland media was picking up on South China Morning Post reports.

Developers' big dreams for smaller mainland China cities falling apart

The developers were betting that lower land prices and the huge growth potential in such cities could generate attractive returns, but the influx of property investment led to chronic oversupply problems.

As a result, developers have been forced to cut prices, some by more than a third in Changzhou, Hangzhou, Nanjing, Ningbo and Qinhuangdao.

The South China Morning Post recently visited the two cities where the first price cuts were seen this year: Changzhou in Jiangsu province, and Hangzhou in Zhejiang.

The huge unsold housing inventories in the two cities could take 22 months to unload, according to industry observers, compared with the normal 12 to 15 months.

"The Changzhou property market is horrible," said Yang Quanqiao, a director for development at Centaline (China).

Yang said land to be sold in coming years could yield 85 million square metres of gross floor area in Changzhou - which has a population of about 4.5 million - enough to build 850,000 100-square-metre flats.

"Changzhou is a small city with limited investor demand," he said. "The supply will probably be enough for 10 years."

Alarm grows over housing supply glut in inner mainland China cities

"You can find a lot of evidence for a negative outlook. For example, some projects have cut prices, others can't sell and then there are these ghost towns," he said. "Many cities have unsold properties that will take over a year to clear. That is alarming. But it will give competitive developers room to buy land parcels as some will leave the market."

He said Vanke would not open any new pipelines of projects this year because of oversupply fears. "But the oversupply can be absorbed over time. There shouldn't be any big problems," he said.

Another local developer, who requested not to be named, said it usually took Changzhou residents about two to three years to move in after they got the keys.

"Owners usually take one or two years for decoration and leave the newly painted flat empty for a year until all the chemical smell is gone, especially buyers with children. We disagree that Changzhou is a ghost town. Outsiders just don't understand Changzhou residents' lifestyle," said the developer.