On April 15, Leyoujia, a real estate agency platform, tweeted that it would cooperate with Shenzhen LVGEM Baishizhou Project to promote the "trade-in" project of Shenzhen real estate.
It is reported that the customer who changes the house can lock the intended house for 2 months by paying the deposit in LVGEM Baishizhou, during which Leyoujia will focus on promoting the old house and sell the old house as soon as possible, and the customer will sign a new house to complete the "old for new" transaction.
Viewpoint New Media understands that "trade-in" is not uncommon in Shenzhen's property market, and institutions such as Shenzhen Central Plains and Shell have also laid out in this model.
According to public information, the Baishizhou project appeared as early as November last year in the "old house for new house" activity in Shenzhen Central Plains.
Bet on Baishizhou
The Baishizhou renovation project is regarded by LVGEM (China) as the fruit of the harvest period, and in the slow market, the worst situation is not only not in the past, but in the present.
During the previous survey of Viewpoint New Media, market participants gave a "less than expected" evaluation of the project's de-industrialization effect.
According to the plan, the Baishizhou project has a total land area of about 460,000 square meters, a total construction area of about 5 million square meters, and a building area of about 3.58 million square meters.
In last year's interim financial report, LVGEM (China) was expected to be regarded as a "new engine for the Group's rapid and steady growth" as the project with the largest saleable value and the strongest liquidity in a short period of time.
In the second half of 2023, the first phase of residential and apartment products of the "new engine" Baishizhou project will finally be launched. In the project subscription stage, only 756 batches of 1,257 residential properties were frozen, and the shortlisted ratio was 0.6. Although this fundraising result is not bad, it can be seen that the market at that time had a strong wait-and-see mood.
Up to now, it has been 6 months since the opening of Baishizhou, and judging from the filing data, it seems to have squeezed out some of the "moisture" at the opening.
According to the data of Shenzhen Fangxin, as of April 16, LVGEM Baishizhou has a total of 1,257 residential units, of which 292 have completed the filing, and the filing rate is 23.23%. If the 275 listings that signed the letter of intent are included, the removal rate is only 45.9%.
The pressure on the decentralization of the apartment part is not small, and only 10 of the 1,489 saleable houses have actually completed the filing, which is less than 1 percentage point, or 0.67%.
As for the sales of the project, LVGEM sees that on the one hand, it will improve the product problems fed back by the market, and even redesign and build the model houses with poor display results, and on the other hand, it will actively cooperate with intermediaries to strengthen the de-industrialization work.
Taking the "old house for house" model as an example, the project appeared in Shenzhen Zhongyuan's marketing poster about "old house for new house" in November 2023.
Viewpoint New Media has learned that the Baishizhou project will be divided into three types of development: residential, apartment and commercial according to special regulations, and the commercial sector includes a shopping center and super Grade A office buildings.
In March 2024, LVGEM (China) announced a profit alert, expecting a loss of approximately RMB2.1 billion in FY2023, compared with a loss of approximately RMB297 million in the same period last year, a year-on-year decrease of 85.86%.
As for the reasons for the loss, LVGEM (China) admitted in the announcement that, on the one hand, it did not recognize the revaluation income from the commercial support of the fourth phase of the Baishizhou Urban Renewal Project from real estate development and sales to leasing and long-term investment as of FY2022.
On the other hand, under the current market conditions, the fair value loss of investment properties has increased significantly as of the end of 2023.
The reason why LVGEM found Shangle Youjia to test the waters of "trade-in" again is also very clear, which is nothing more than to take advantage of the recent second-hand housing transactions in Shenzhen.
"New" is not new
Market participants pointed out that the "old for new" policy can help open up the flow of supply and demand in the first-hand and second-hand housing market to a certain extent, and activate the demand for improvement.
"Since most of the replacement projects are difficult to remove, intermediaries need to guard against falling into the embarrassing situation of replacing 'unsellable' second-hand houses with 'unsellable' first-hand houses. ”
Judging from the disclosed cooperation content, the cooperation between Leyoujia and Baishizhou project is more like a "point-to-point" service, that is, the customer places a new house, Leyoujia completes the sale of the old house, and the customer returns the old house sales funds before the "replacement" is successful.
According to the 2-month lock-in period of the intended house, the de-conversion cycle of Leyoujia's "old house" is only 60 natural days, which is a big challenge for real estate agencies.
Regarding the news of the cooperation between the two sides, Viewpoint New Media confirmed the news with the staff of Leyoujia for the first time, and revealed: "The detailed rules of 'trade-in' will be released in the near future. ”
From the perspective of the "trade-in" business model of housing development projects, there are three main categories.
The first is the old house refinancing model, that is, after the old house is appraised, the property is transferred to the real estate enterprise and the bank reloan is completed, and the old house loan is transferred to the buyer as the house payment as the new house payment deduction.
The second is the acquisition model, in which the state-owned enterprise platform or developer directly acquires the old house, and the sale proceeds are used to purchase the new house in the corresponding project. In April this year, the Zhengzhou Housing Management Bureau planned to complete 10,000 sets of second-hand housing "selling the old and buying the new, exchanging the old for the new", which is the model.
The third is the model of helping to sell, in which the developer and the real estate brokerage agency jointly launch the "trade-in" service, which is the cooperation model between LVGEM Baishizhou and Leyoujia.
The third of these patterns is not new to Shenzhen's property market, at least not for the first time.
Taking the above-mentioned Central Plains activities as an example, in addition to the Baishizhou project, the replaceable real estate projects of "old houses" also include Yuexiu Chaoyue Mansion and Ruiyue Mansion, Zhongzhou Bay Yinghai Phase I, Hongrongyuan Boyu Mansion and Shangyun, Yanlord Park Century and other projects.
Data source: opinion index collation, Shenzhen Fangxin website
According to the observation of Guandian New Media, the highest record of projects participating in the "old for house" model can reach 81.45%, and the lowest residential record is more than 23%.
The whole is divided into two types, one is the project with poor deification effect, and the other is the project that is partially cleared out of the market.
According to Shenzhen Fangxin data, 2,245 new homes will be transacted in Shenzhen in 2024, a decrease of nearly 1,000 units from the same period last year, a year-on-year decrease of 29.82%. For the Shenzhen market, although new houses are still slowly being repaired, the overall transaction volume of the market has not decreased significantly, and the second-hand housing market has an obvious upward trend.
According to the monitoring of Leyoujia Research Center, in the past 3 months, under the continuous superposition effect of a number of easing policies, the number of second-hand housing online signatures in Shenzhen exceeded 5,100 sets, and the number of second-hand housing transfers exceeded 3,800 sets, and the second-hand housing data hit a new high.
Compared with the transfer, the online signature data can reflect the market situation faster. According to the small program of the Shenzhen Housing Association, in March, the number of second-hand housing online signatures (i.e., contracts recorded) in Shenzhen reached 5,196, up 117% month-on-month and 5% year-on-year. This is also the first time in 3 years that the monthly online signature volume has exceeded 5,000 sets again.
Data statistics: opinion index collation, Leyoujia Research Center
It is not difficult to see that the current Shenzhen new housing transaction market is being diverted by low-cost second-hand housing.
Compared with the demand for new houses, LVGEM Baishizhou is obviously eyeing the hot second-hand trading market, and intends to help customers complete the disposal of "old houses" through the method of "exchanging the old for the new", and at the same time, drive the decentralization of its own projects.
According to the observation of Guandian New Media, in the first quarter of each year, the mainstream customer groups in the market are mainly rigid needs and just reforms. Last year's second-hand housing transaction data showed that after the release of demand for just reform, it entered a state of continuous decline.
LVGEM's choice to enter the game at this time does not seem to be the best opportunity.