Hefei Home Prices Jump in 2016, Developer Loses Money in 2017
Deleveraging’s collateral damage.
Caijing: 去年合肥房价涨幅全球第一 开发商如今却开始亏本
In January this year, by the Hurun Institute and the United States jointly issued by the global housing price index shows that Hefei housing prices rose more than 40%, ranking the first 2016 global house prices rose.
But since the second half of last year, Hefei property market began to strictly control, policies continue to overweight, the city’s real estate market and therefore into silence.
Which was involved in this hot torrent of those spending big bucks to win the high prices of housing enterprises, such as Anhui, the only listed housing prices Hefei City Construction, is currently facing a more severe high price dilemma. Not long ago, the company issued a quarterly release in addition to disclosure of the current performance decline, a difficult to be aware of the outside world is even more surprising:
The company expects first half net profit fell 50% to 100%!
…Reporters noted that the Hefei City Construction due to an increase in financial costs in the first quarter of this year, financial costs increased by 52.109 million yuan, an increase of 897.4% year on year, while net profit of 42.858 million yuan, down nearly 40%.
In the face of the upcoming semi-annual report, Hefei City Construction said that its net profit is expected to last year’s 70,104,000 yuan down 50% to 100%, which means that the housing business if the worst case of profitability, then may hit the profit and loss critical point.
Hefei City Construction explained that compared with the same period last year, the scale of operating income changed little, but due to increased bank borrowings, financial costs increased, resulting in 2017 first half profit decline more.