remained stable Chart 1 Month-on-month change in the transacted area of primary residential property (May 2011)
59.8%
Tianjin 51.5%
Shenzhen 42.5%
Hangzhou
38.5%
Beijing
36.1%
Guangzhou
32.5%
Chengdu
30.1%
Shanghai 12.5%
Shenyang 7.6%
Wuhan -30.0%
Chongqing -40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Month-on-month change
In May 2011, the total transacted
area of new homes in ten major Mainland cities rebounded significantly month on month, but the total area remained at a relatively low level.
In May 2011, the total transacted area of new homes in ten major Mainland cities rebounded from the previous month, but the total area remained at a relatively low level. Meanwhile, new home prices, adjusted by differences in property type, location, fittings and whether they were presale or completed units, edged up a marginal 0.7% month on month. In May, total primary residential transacted area in the ten cities rebounded 22.5% from April. Aside from Chongqing (-30.0%), all of the ten major cities recorded growth, with Tianjin (59.8%) and Shenzhen (51.5%) witnessing the largest gains. Compared with a year ago, the total transacted area in the ten cities increased 27.4%. However, the sales figure was still relatively low. Most of the cities saw transacted areas drop in May 2011 compared with their average in 2010, with Chongqing (-43.6%), Tianjin (-26.1%), Chengdu (-24.4%) and Beijing (-23.8%) experiencing the biggest declines. Meanwhile, the rebound in new-home sales was due to increased supply and lower prices in some of the cities. Month-on-month price drops were the sharpest in Shenzhen (-7.1%) and Tianjin (-1.9%), while at the same time, transacted areas recorded the biggest month-on-month gains in these two cities, reflecting the influence of price reductions in promoting primary sales. However, in the short term, price cuts are not expected to figure prominently in developers marketing strategies. Given that developers financial strength has not deteriorated markedly, we do not expect price discounts to be widely offered across the country. However, policy risks in the property market remain high: the central government twice raised RMB-deposit reserve rates of financial institutions by 50 basis points, on 18 May and 20 June. Rates have been raised six times so far this year and have now reached a historical high of 21.5% in major financial institutions. These increases have the effect of tightening developers credit and adding funding pressure. They also suppress home-buying demand, with commercial banks in some cities lifting mortgage rates and down-payment ratios for first-home purchases. Looking ahead, the supply of new homes in the ten major cities will continue to increase. We expect sales volume to continue growing, but overall to remain relatively low, resulting in higher inventory levels. Currently, it would take about 11 months for the market to absorb all available inventory in the ten cities (assuming sales rate remains the same as the past three months average). We believe rising inventory and funding pressure will suppress home prices from the third quarter.
Chart 2 Price trend of primary residential property (in ten major cities)
English
2007 Jan = 100
240 220 200
The average price of new homes
in ten major Mainland cities taking into account differences in property type, location, fittings and whether they were presale or completed units rose a marginal 0.7% in May, from the previous month.
180 160 140 120 100
Jan
Jul 2007
Jan
Jul 2008
Jan
Jul 2009
Jan
Jul 2010
Jan 2011
Note: The ten major cities include Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chongqing, Chengdu, Hangzhou, Wuhan and Shenyang. The home prices of these cities have been adjusted to take into account differences in property type, location, fittings or whether they were presale or completed units.
registered month-on-month drops in adjusted new-home prices in May 2011, with Shenzhen experiencing the largest decline (-7.1%), followed by Tianjin (-1.9%).
6.5%
Shenyang 2.5%
Shanghai
2.3%
Wuhan 1.4%
Chengdu Hangzhou
1.1%
Beijing
0.9%
Chongqing
0.6%
Guangzhou
-1.0%
Tianjin Shenzhen
-1.9% -7.1%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Month-on-month change
Holdways.com
KnightFrank.com.cn
JUNE 2011
Table 4
Average per-sq-m prices of primary residential property (May 2011)
English
The urban, suburban and
city-wide per-sq-m primary residential prices were the highest in Shanghai, followed by Beijing.
Urban area (RMB per sq m)
Suburban area (RMB per sq m)
City-wide (RMB per sq m)
Month-on-month change (%)
Beijing
31,327
14,419
21,429
3.6%
Shanghai
38,233
17,990
22,387
1.5%
Guangzhou
24,091
9,718
11,254
6.6%
Shenzhen
15,653
15,653
22.1%
Tianjin
19,304
8,170
10,434
5.6%
Chongqing
7,834
5,830
7,656
5.5%
Chengdu
9,541
5,865
6,887
1.6%
Hangzhou
25,904
13,575
17,573
9.4%
Wuhan
9,595
6,226
7,497
5.6%
Shenyang
6,711
5,785
6,215
9.8%
19,136
9,387
12,778
0.5%
City
Average
Note: The average prices are unadjusted by property attributes.
Table 5
Average unit prices of primary residential property (May 2011)
Of all the ten major cities,
Shanghai had the highest urban, suburban and city-wide primary residential unit prices.
Urban area (RMB million)
Suburban area (RMB million)
City-wide (RMB million)
Month-on-month change (%)
Beijing
3.45
1.24
2.03
0.5%
Shanghai
4.83
1.98
2.53
2.9%
Guangzhou
2.61
1.15
1.32
0.9%
Shenzhen
1.34
1.34
28.6%
Tianjin
1.71
0.82
1.02
1.3%
Chongqing
0.74
0.56
0.72
6.8%
Chengdu
0.88
0.58
0.67
1.9%
Hangzhou
2.79
1.40
1.84
15.3%
Wuhan
0.98
0.62
0.76
7.6%
Shenyang
0.55
0.54
0.54
6.4%
Average
2.07
0.94
1.29
0.8%
City
Note: Price per unit is generated by dividing total sales consideration by the total number of transacted units (unadjusted by property attributes).
Table 6
Transacted area (thousand sq m)
Month-on-month change (%)
Year-on-year change (%)
Beijing
761.0
38.5%
53.7%
Shanghai
819.9
30.1%
165.5%
Guangzhou
917.3
36.1%
85.4%
Shenzhen
249.9
51.5%
134.8%
Tianjin
816.2
59.8%
18.2%
Chongqing
575.6
30.0%
62.8%
Chengdu
1,274.4
32.5%
14.9%
Hangzhou
383.4
42.5%
119.8%
Wuhan
645.6
7.6%
10.8%
Shenyang
1,043.7
12.5%
1.2%
Total
7,487.0
22.5%
27.4%
City
In May 2011, all ten major cities
except Chongqing (-30.0%) witnessed month-on-month growth in the transacted areas of primary homes, with Tianjin (59.8%) recording the largest increase.
English
Total transacted area of primary residential property (May 2011)
Table 7
Number of primary residential units sold by price range (May 2011)
In May 2011, Shanghai sold the
highest number of new luxury homes valued at RMB5 million or above (567 units), followed by Beijing (495 units) and Hangzhou (217 units).
Holdways.com
City
< 1.0
Price range (RMB million per unit)
1.0-<2.0 2.0-<3.0 3.0-<5.0
5.0
Beijing
2,515
3,344
902
779
495
Shanghai
1,043
3,202
1,419
1,012
567
Guangzhou
4,170
2,650
542
290
152
Shenzhen
1,241
1,303
204
151
31
Tianjin
5,376
2,279
354
234
134
Chongqing
5,486
782
119
80
68
Chengdu
11,829
1,105
92
65
53
Hangzhou
730
1,735
681
303
217
Wuhan
5,343
949
71
17
12
Shenyang
10,951
835
122
85
10
KnightFrank.com.cn
JUNE 2011
Table 8
Total floor area of primary residential property available for sale (May 2011) English
All of the ten Mainland cities,
except Shenyang (-10.4%), registered month-on-month increases in the unsold inventory of new homes in May 2011, with Hangzhou recording the largest gain (18.7%).
Available inventory (million sq m)
Month-on-month change (%)
Year-on-year change (%)
Beijing
10.2
1.8%
0.7%
Shanghai
7.3
7.7%
28.6%
Guangzhou
6.2
6.9%
46.3%
Shenzhen
4.4
5.2%
10.7%
Tianjin
8.2
10.9%
27.0%
Chongqing
4.4
14.4%
27.1%
Chengdu
9.2
6.6%
171.8%
Hangzhou
3.8
18.7%
88.5%
Wuhan
14.4
1.6%
9.7%
Shenyang
8.0
10.4%
14.6%
Total
76.2
4.3%
18.1%
City
Table 9
In May 2011, The Manor
in Shanghai was the most expensive primary residential project in China, priced at RMB143,646 per sq m.
Most expensive primary residential project in each city (May 2011)
Project
District
Transaction volume (number of units)
Average price (RMB per sq m)
Imperial Mansion
Dongcheng
125,561
The Manor
Luwan
143,646
Canton View Bay
Yuexiu
48,407
Triumphal Bay
Longjiang
80,000
No.3 Hai He Mansion
Hebei
46,610
Chongqing
Pearl on the River
Jiangbei
24,649
Chengdu
Island by the River
Chengxi
33,825
Hangzhou
Orchid Residence
Xiacheng
21
53,456
Wuhan Tiandi
Jiang'an
32,380
Shenyang MIXc Residence
Heping
14
22,000
City Beijing Shanghai Guangzhou Shenzhen Tianjin
Wuhan Shenyang
Table 10
Urban areas
Suburban areas
Beijing
Dongcheng, Chaoyang, Xicheng,
Xuanwu, Fengtai, Congwen, Haidian, Shijingshan
Fangshan, Mentougou, Tongzhou,
Shunyi, Changping, Daxing, Huairou, Pinggu
Shanghai
Huangpu, Luwan, Xuhui, Changning,
Zhabei, Yangpu, Hongkou, Pudong New Area, Jing'an, Putuo
suburban districts in each city makes inter-city price comparison more relevant.
Urban and suburban areas of ten major Chinese cities
Shenyang Beijing Tianjin
Chengdu
Wuhan
Chongqing
Shanghai Hangzhou
Guangzhou Shenzhen
Holdways.com
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JUNE 2011 Bringing clarity to Chinas property market English
We have access to a unique
database covering the market data of 35 Mainland cities, with the potential of expanding to 100 cities.
China has the worlds largest housing market, and investorsboth foreign and localhave immense interest in this thriving sector. In 2010, an estimated 9.3 million new homes were sold across Mainland China. The real estate sector accounted for 23.8% of Chinas RMB24.1-trillion fixed asset investments last year. Meanwhile, foreign direct investment (FDI) in Chinas real estate sector amounted to USD24.0 billion in 2010, accounting for 22.7% of the countrys total inbound FDI. Despite the importance of this sector, there is much misunderstanding about Chinas property market, due to a lack of consistent statistics. For example, inter-city price comparison is not always worthwhile, as some cities mix the data of subsidised housing with private housing statistics, while others do not. The fact that cities expand their boundaries and include additional suburbs in their jurisdictions at different rates has made the issue even more complex. Against this backdrop, international property consultancy Knight Frank and China-based property consultancy Holdways have formed an alliance to fill the gap in accurate statistical data and bring clarity to Chinas property market. We have access to a unique database covering the market data of 35 Mainland cities, with the potential of expanding to 100 cities. We are committed to applying our expertise in property research and analysis to organise and present the data in a consistent and concise way. This report covers the primary-market data of Chinas ten most important cities, spanning the Bohai Rim region in the north; the Yangtze River Delta in the east; the Pearl River Delta in the south; and the western regions. To facilitate worthwhile inter-city comparison, some data, such as the average price of new home sales in the private market, have been reorganised to cover only key urban areas, with the delineation of urban and suburban districts in each city clearly stated in Table 10. Please feel free to contact us if you require more specific information about Chinas property market.
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English
(20115) 59.8%
Tianjin
51.5%
Shenzhen
42.5%
Hangzhou
38.5%
Beijing
36.1%
Guangzhou
32.5%
Chengdu
30.1%
Shanghai
12.5%
Shenyang
7.6%
Wuhan
-30.0%
Chongqing
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
/ 0.7 22.5(-30.0) 59.851.5 27.4
(-43.6)-26.1-24.4 -23.8 (-7.1) (-1.9)
: 0.50.5 21.5
( )
Holdways.com
KnightFrank.com.cn
English
0.7
=100 240 220 200 180 160 140 120 100
2007
2008
2009
2010
2011
(20115)
Shenyang
Shanghai
(-7.1) Wuhan
(-1.9) Chengdu
Hangzhou
6.5% 2.5% 2.3% 1.4% 1.1%
Beijing
0.9%
Chongqing
0.6%
Guangzhou
-1.0%
Tianjin
Shenzhen
-1.9% -7.1%
-8%
-6%
-4%
-2%
0%
10
2%
4%
6%
8%
(/)
(/)
(/)
31,327
14,419
21,429
3.6%
38,233
17,990
22,387
1.5%
24,091
9,718
11,254
6.6%
15,653
15,653
22.1%
19,304
8,170
10,434
5.6%
7,834
5,830
7,656
5.5%
9,541
5,865
6,887
1.6%
25,904
13,575
17,573
9.4%
9,595
6,226
7,497
5.6%
6,711
5,785
6,215
9.8%
19,136
9,387
12,778
0.5%
English
(20115)
(20115)
()
()
()
344.8
124.3
203.0
0.5%
482.5
198.0
253.4
2.9%
261.0
115.4
132.3
0.9%
133.5
0.0
133.5
28.6%
171.0
81.8
101.7
1.3%
73.6
55.6
72.1
6.8%
88.0
58.0
66.8
1.9%
278.8
140.0
183.7
15.3%
98.2
62.4
75.7
7.6%
54.5
53.6
54.0
6.4%
206.6
93.9
128.9
0.8%
Holdways.com
KnightFrank.com.cn
11
(20115) English
- 30.0
59.8
76.1
38.5%
53.7%
82.0
30.1%
165.5%
91.7
36.1%
85.4%
25.0
51.5%
134.8%
81.6
59.8%
18.2%
57.6
30.0%
62.8%
127.4
32.5%
14.9%
38.3
42.5%
119.8%
64.6
7.6%
10.8%
104.4
12.5%
1.2%
748.7
22.5%
27.4%
(20115)
567 495217
12
< 1.0
1.0-<2.0 2.0-<3.0 3.0-<5.0
5.0
2,515
3,344
902
779
495
1,043
3,202
1,419
1,012
567
4,170
2,650
542
290
152
1,241
1,303
204
151
31
5,376
2,279
354
234
134
5,486
782
119
80
68
11,829
1,105
92
65
53
730
1,735
681
303
217
5,343
949
71
17
12
10,951
835
122
85
10
()
1,023.9
1.8%
0.7%
732.2
7.7%
28.6%
617.7
6.9%
46.3%
442.2
5.2%
10.7%
816.9
10.9%
27.0%
444.9
14.4%
27.1%
922.7
6.6%
171.8%
382.6
18.7%
88.5%
1,435.5
1.6%
9.7%
803.1
10.4%
14.6%
7,621.8
4.3%
18.1%
English
(20115)
( - 10.4)
18.7
(20115)
143,646
Holdways.com
125,561
143,646
48,407
80,000
46,610
24,649
33,825
21
53,456
32,380
14
22,000
KnightFrank.com.cn
13
English
14
35
100
93024.1 23.8
English
35100
()
Holdways.com
Newmark
Knight Frank47
2096,840
7,550
KnightFrank.com.cn
15
239.922.7
Contacts Editor-in-Chief
Thomas Lam Director, Head of Research, Greater China Knight Frank
Jacky Wei Senior Manager, Research & Consultancy, Beijing Knight Frank
+86 10 8518 5758 Ext 816
jacky.wei@cn.knightfrank.com
Knight Frank office
Suite 302, Tower E1, Oriental Plaza, No 1 East Chang An Avenue, Dong Cheng District, Beijing 100738, PRC 1302100738 T +86 10 8518 5758 F +86 10 8518 5755 KnightFrank.com.cn Holdways office Unit 1308, Tower C, Webok Times-Center, 17 South Zhongguancun Street, Haidian District, Beijing 100081, PRC 17C1308100081 T +86 10 5128 4009 F +86 10 8857 2885 Holdways.com
This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank or Holdways for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the views of Knight Frank or Holdways in relation to particular properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank and Holdways. Knight Frank 2010
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