Meanwhile, Trapped Wenzhou Bosses Are Liquidating Properties
18 October, 2011, 17:50. Posted by ZarathustraTags: Real Estate, Shanghai, Wenzhou
While the banks are tightening the screw on mortgages even further, Businessmen from Wenzhou who are not escaping or killing themselves are liquidating their properties assets.
This is not something new: I have noted that Wenzhou-ren have been selling off properties in Wenzhou since some months ago. Now, however, the selling pressure from Wenzhou-ren is spreading. Caixin reports that several Wenzhou properties investors, who are also business owners themselves, are offering to sell their property holdings in Shanghai and Fuzhou at large discount. One entrepreneur, according to the Caixin’s story, has put up 7 properties on sale at an average of 10% discount relative to the current market prices, and will use the sales proceed to pay off debt. They are also selling in Fuzhou according to the report.
This should be an expected consequence of over-levered businesses owners, facing with increasing pressure from slowing businesses and credit tightening, are going to deleverage by selling of property assets. As this drama continues, I will not be surprised to see Wenzhou-ren selling properties in Hong Kong. Early this year, I have already flagged the possibility that Chinese buyers will stop buying properties in Hong Kong as China tightens monetary policy. Now, I think we can expect some selling from the Mainland Chinese.
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About Zarathustra
Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.
