In yet another sign of China’s real estate crisis, 50 percent of the country’s leading real estate developers failed to reach their 2011 sales targets. According to a recent report from China Real Estate Information Corp (CRIC), only eight out of twenty top property developers in China reached their goals in 2011.
The government restrictions on the real estate market have started to make their impact felt, with many buyers losing their enthusiasm for new housing and many developers having to resort to discounts and other promotions to prop up sales. From a recent China Daily story:
Major domestic developers, including the nation’s largest developer by market value China Vanke Co Ltd, Shanghai-based Greenland Group, Hong Kong-listed Longfor Properties Co Ltd, all missed their sales goals in 2011, said the CRIC report.Vanke topped the list with sales of 121 billion yuan ($19 billion) in 2011, but Xinmin Evening News reported that the company had set a sales target of 140 billion yuan for the year.Ranked third in the list, Greenland sold 8.08 million square meters (sq m) of gross floor area for 77.6 billion yuan, which is still a shortfall from its sales goal of 10 million sq m and 110 billion yuan.
Making matters worse, another two of the top 20 developers had not made their sales goals public, so the failure rate may actually be worse than it appears. The CRIC study does not point out, however, what the success rate was for developers hitting their sales target in earlier years.
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