The mainland's biggest developer says the property market's best days are behind it but all the talk about a looming crisis is misplaced.
"The tightening measures since 2008 have largely deleveraged the industry," said China Vanke's chief executive Yu Liang, pointing out that industry leaders like Vanke might gain as the sun set on the "golden age" and the "silver age" took hold.
Yu's optimism stands in stark contrast to the views of Song Weiping, the founder and chairman of Greentown China, who last week tore into mainland authorities for creating an environment that forced him to hand over control of his firm to Sunac China.
Measures such as restrictions on home purchases and mortgage loans have been making life difficult for luxury-home developers like Greentown and Sunac. Many of their peers have already shifted their product mix to focus more on end-use buyers of first and second homes.
Vanke has managed to beat the market gloom so far as its focus has long been end-users.
Yu cited the Sunac-Greentown deal as marking the beginning of consolidation in the mainland's property industry, which has more than 85,000 players. "It's not going to be big fish eating small fish," he said. "It will more be in the form of co-operation rather than takeover."
Ratings agency Moody's termed the Greentown deal as "credit negative" for Sunac as it would weaken the latter's credit metrics.
Worries about a property bubble bursting and taking down the economy with it have intensified of late as the industry cools, with sales and construction falling off a peak last year.
Home prices have taken a hit after rising at a much faster pace than the economy and household income in past years. It now takes an average family in Beijing more than 17 years to afford a home even as the market shows signs of a glut, raising the spectre of a bursting of a bubble.
Analysts at brokerage CLSA, after conducting a study on 609 projects across 12 cities, found 10.2 million homes completed since 2000 have been lying vacant.
In the current slowdown, Yu said, he saw a chance to buy property assets from non-property firms as they spin off non-core assets that were becoming a liability as the market soured. He is also open to tie-ups with developers with cheap land reserves.
A collapse in March of privately held developer Zhejiang Xingrun dented global investors' interest in the mainland property sector.
But Yu said he believed a massive collapse of small developers was unlikely as they would be bailed out by bigger players, local governments and banks.
"The industry still has a long way to go before hitting the tipping point," said Tan Huajie, Vanke's board secretary.
Yu sees the industry coming to be dominated by top 100 players with a market share of 50 to 60 per cent in 15 years, with the rest being split among 10,000 smaller developers. "The rest will quit naturally, such as by refraining from buying more land, rather than be forced out through bankruptcies," he said.