Analysts: Prices Will Not Bubble In The Two Or Three Tier Cities In The Short Term.

In December 27th, a number of analysts interviewed by the reporters agreed that the two or three line cities had sufficient new construction and follow-up supply.

In December 27th,

Chen Cong, a real estate analyst at CITIC Securities, also pointed out in a mid December report that quick start, moderate sales and active sales will become the mainstream strategy of developers.

Chen Cong said that due to cash flow control, and sales are relatively smooth, so developers can not cover the disk is unlikely.

Chen Cong said that because of the uncertainty of the future, housing prices will not bet on a single possibility, will take offensive and defensive strategy, and in 2011 will soon start, moderate, speed up sales strategy is offensive and defensive.

The core of this strategy is to filter periodic risks with speed. The result is that housing is abundant and the possibility of price bubbles is decreasing.

At an internal conference in late December, Meng Qingyu, deputy director of 601668.SH, said that at present, more than 80% of China's land reserves are in two or three line cities.

Li Wenjiang, chief analyst at 0733.HK, pointed out that in the first three quarters of this year, 36% of the ten major brand developers in the 000002.SZ market were located in second tier cities. Only 9% of them were located in the first tier cities. The high land reserve and rapid start up in the two or three line cities were unlikely to cause bubbles in the two or three tier cities in the short term.

At present, a large number of new projects are concentrated in two or three line cities, further reducing the possibility of short-term bubbles in the two or three tier cities.

Not long ago, a senior executive of Vanke said at an internal meeting that at present, only 6% of the first tier cities in China are newly built, and the rest of the new construction area is distributed in 234 line cities.

Previously, the Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences released a report that through the comparative analysis of the centralized paction prices of two ordinary residential areas in 35 large and medium-sized cities in September 2010, it was found that the average price bubble of general merchandise housing in two major sections of 35 large and medium-sized cities in the country was 29.5%, and that 7 bubble cities in Fuzhou, Hangzhou, Nanning, Qingdao, Tianjin, Lanzhou and Shijiazhuang were all over 50%.