The collapse of Xing Run Real Estate Investment is the latest sign of a “property market meltdown” in smaller cities within 100 miles of Shanghai, TheStreet’s Eric Johnson reports.
While the real estate market is still healthy within the urban limits of Shanghai, developers started slashing prices on a glut of unsold apartments in Hangzhou last month, and Xing Run recently abandoned an unfinished residential complex in Fenghua, TheStreet said, citing media reports.
Analysts at UBS Securities say smaller cities around the country have “relatively high inventory levels” of new homes, and that a combination of oversupply and tight financing could be a drag on construction activity.
In the long term, the Chinese government expects hundreds of millions of people will migrate from rural areas to cities in the years ahead, and will provide incentives to meet that demand. Source: thestreet.com.