The "price reduction trend" in Guangzhou's real estate market has spread to Yuexiu District, and the "Qiandiwang" project is selling at a 70% discount

The wave of price reductions in the Guangzhou real estate market ultimately affected Yuexiu District.

"A first-hand real estate development in Yuexiu District has recently launched a special offer unit starting with '8'. Are you considering it?"

Senior intermediary agent Chen Qian (pseudonym) has recently frequently sent such messages to clients. She said that the prices of several properties in Yuexiu District have been maintained at over 100000 yuan/square meter, but recently they have introduced fixed price units. Coupled with the impact of the new policies in the real estate market, the number of property viewing customers in Yuexiu District has significantly increased.

30% off the price of the "Qiandiwang" project

"The earliest price reduction was in Gongyuanqian Junxi Mansion, which was previously sold at prices starting with the letter '6'. Although it was mostly for lower level units, this price has returned to the level of seven or eight years ago. Since June, Guangzhou Chengtou Dongyuan Mansion and Hankou Real Estate Ganghuitai have also launched special price units starting with the letter '8'." Chen Qian explained.

It is understood that the largest price reduction in the real estate market in Yuexiu District is currently the "Qiandiwang" project, Dongyuan Mansion. The project opened in the middle of last year, and due to the high floor price of 64576 yuan/square meter, the initial selling price was 120000 to 180000 yuan/square meter. Later, some fixed price units of 91 square meters and 132 square meters were gradually introduced, but the prices were still between 100000 to 125000 yuan/square meter. Nowadays, the minimum unit price for a 92 square meter northbound three bedroom apartment is 85000 yuan/square meter, which is a 70% discount compared to the opening price of 120000 yuan/square meter.

Industry insiders have analyzed that Dongyuan Mansion is considered a better choice among several new developments in Yuexiu District in terms of scale, products, and matching primary schools. But in the past, excessive pricing led to slow turnover, and now prices are more affordable, which is expected to stimulate sales.

The current building's Hong Kong Hui Tai has also launched multiple fixed price units, such as a 96 square meter south facing Wangjiang three bedroom apartment with a total price of 7.99 million yuan, and a 113 square meter three bedroom apartment with a total price of 9.38 million yuan. The converted unit price is 83000 yuan/square meter, which is a significant decrease from the initial 100000 to 120000 yuan/square meter.

As for Junxi Mansion, after experiencing a wave of hot sales starting with "6", the current selling price has rebounded to "7", with a total price of 9.99 million yuan for a 140 square meter four bedroom apartment. The Vanke Zhenyue Mansion, which is slightly more popular in the market, has a price range of 90000 to 110000 yuan/square meter, with the lowest selling price for a 107 square meter three bedroom apartment being 85000 yuan/square meter.

Restricted customer base and slow new drive elimination

Why do the always proud properties in Yuexiu District choose to lower their prices?

The above industry insiders believe that the first factor is market factors. The current overall environment of the real estate market is poor, coupled with changes in the land supply structure in the past two years, which has led to an oversupply of high-end projects in the urban area. Real estate projects generally adopt a "price for quantity" strategy to reduce demand.

Secondly, insufficient product strength is also an important reason. Currently, millions of luxury residential units in the market are very popular, with a usage rate close to 100%. In contrast, several new buildings in Yuexiu District are small in scale and have high unit prices. Some individual buildings have outdated unit designs due to historical reasons, and purchasing new houses in other areas at the same price increases the usable area by 20%. Therefore, if the properties in Yuexiu District do not decrease in price, it may be more difficult to sell.

According to data from Yangguang Jiayuan, among several new properties in Yuexiu District, although Vanke Zhenyue Mansion has a relatively short opening time, 29 units have been sold and the turnover rate is relatively ideal. The transaction volume of Dongyuan Mansion and Yunhan Mansion is only in single digits, with turnover rates of 2.8% and 1.4%, respectively.

"The limited customer base is also a very important factor." Chen Qian said that homebuyers in Yuexiu District are mainly divided into two categories: one is the surrounding "Lao Guang", and the other is the educational resources that parents in other areas value in Yuexiu District. However, the current problem faced by several new developments is that, except for the primary schools corresponding to Dongyuan Mansion which are relatively good, the corresponding primary schools of other properties are generally average. This leads parents and buyers to prefer some second-hand houses with slightly larger scale, better community environment, and less than 20 years of age, such as Dongfeng Guangchang, Jincheng Garden, Fuli Dongdiwan, Xiaobei Yujing, and Dongfang Wende Square.

For buyers who do not have the sentiment of "Yuexiu District", they are more willing to choose improved large-scale properties in Tianhe District or Haizhu District, which have advantages in brand, landscape, products, and surrounding city interfaces.

"Another issue is that many 'Lao Guang' who like Yuexiu District can accept these products, but their funds are not enough to support housing prices of over ten million yuan. Even if they are 'sell one buy one', the funding gap is still large, so several new properties have to lower their prices." Chen Qian added.

According to data from the Guangzhou Zhongyuan Research and Development Department, as of the end of May, the inventory of first-hand houses in Yuexiu District was 90000 square meters. Although the inventory level is much lower than other regions, only more than 10 sets are sold each month, resulting in a disposal cycle of 51.8 months, far higher than the city's 23.2 month level, and also the highest among the 11 districts in Guangzhou.

The road to urbanization for the new development in Yuexiu District is still long.