Housing market slump
However, the CEO of a brand property company sees it differently: "It sounds like a generous offer, but it's inadequate; there are over 440 developers in Ordos, so assuming we all get our fair share, the portion will be negligible."
An enterprise running mobile amusement parks in various Chinese cities opened for business in Ordos in 2010 with the plan to establish a carnival there, and a commitment that included plans for 1,300 mu (1 mu= 0.0667 hectares) in phase one. "Conservatively estimated, we thought it would be easy to make three to four billion yuan from the program" said the developer, "but unfortunately we ran into this situation and now it is impossible to transfer the land use while others face the same slump; this project has to be put aside."
The 2011 Ordos property report hasn't been released yet but local experts calculate merely 2 million square meters of commercial space has been sold, only 20 percent of last year. The commercial building Xinghewan is a good example; it has tried really hard to attract customers, but the results are disappointing. For its launch in September, it sent out over 600 agents to sell homes but now only 30 remain.
The locus of the crisis
The city of Ordos was established only ten years ago, and is still in its infancy. It enjoyed an artificial economic boom for one decade.
External pressures have been daunting, and many problems accompanied the excessive speed of the community's growth. Disorderly urban planning, excessive new construction, a lack of competent talent, and inadequate investment channels are some. The current shortage of capital is just the last straw that harshly exposed all these issues and revealed the price that must be paid for unhealthy growth.
"It may be not a bad thing", reflects one developer, "as this is the first time we are feeling chill weather. It is a warning to us to calm down and be gracious about it; it is not like the Ordos property market is in decline now from a stronger position."
True. A decade ago, Ordos was a pasturing area dotted with Mongolian yurts, sheep and cattle. Today, it is a modern city with skyscrapers, albeit a largely deserted one. This is neither a good change nor a bad one, just time for Ordos to steady its pace.
