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China Residential Market Watch

JUNE 2011

JUNE 2011

market Highlights
English

Primary home sales picked up while prices


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.

Chart 3
Month-on-month price change in primary residential property (May 2011)

Some major Mainland cities


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

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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

Baoshan, Chongming, Fengxian,


Jiading, Jinshan, Minhang, Nanhui,
Qingpu, Songjiang

Guangzhou

Yuexiu, Liwan, Tianhe, Haizhu

Baiyun, Songhua, Panyu, Huadu,


Huangpu, Luogang, Nansha,
Zengcheng

Shenzhen

Luohu, Futian, Nanshan, Yantian,


Longjiang

Tianjin

Heping, Hedong, Hexi, Nankai,


Hebei, Hongqiao

Xiqing, Dongli, Jinnan, Beichen,


Wuqing, Baodi

Chongqing

Dadukou, Jiangbei, Jiulongpo,


Nanan, Shapingba, Yubei, Yuzhong

Banan, Beibei, Changshou,


Hechuan, Jiangjin, Wanzhou

Chengdu

Jinjiang, Qingyang, Jinniu, Wuhou,


Chenghua

Longquanyi, Wenjiang,
Qingbaijiang, Xindu, Shuangliu,
Pixian

Hangzhou

Shangcheng, Xiacheng, Xihu,


Gongshu, Jianggan

Binjiang, Xiasha, Yuhang, Zhijiang


Development Zone

Wuhan

Jiang'an, Jianghan, Qiaokou,


Hanyang, Wuchang, Qingshan,
Hongshan

Dongxihu, Hannan, Caidian,


Jiangxia, Xinzhou, Huangpi

Shenyang

Shenhe, Heping, Huanggu, Dadong,


Tiexi New District

Sujiatun, Dongling, Shenbei New


District, Yuhong New District

English

City

The delineation of urban and


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

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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.

About Holdways

About Knight Frank

Beijing Holdways Information & Technology

Knight Frank LLP is the leading independent

Co Ltd (hereinafter referred to as Holdways),

global property consultancy. Headquartered

founded by the China National Real Estate

in London, Knight Frank and its New York-

Development Group Corporation, was one of

based global partner, Newmark Knight Frank,

the first property information and consultancy

operate 209 offices in 47 countries across six

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With comprehensive property and finance

handle in excess of US$755 billion worth of

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analytical power, and staffed by qualified and

from individual owners and buyers to major

experienced professionals, Holdways provides

developers, investors and corporate tenants.

real estate intelligence, market research,


competitor analysis and strategic consultancy
services to both domestic and international
companies.

Knight Frank has a strong presence in the


Greater China property markets, with offices
in Hong Kong, Beijing, Shanghai, Guangzhou
and Macau, offering high-quality professional
advice and solutions across a comprehensive
portfolio of property services.

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

Knight Frank and Holdways oces

+852 2846 4819


thomas.lam@hk.knightfrank.com
Assistant Editor-in-Chief

Jason Hu
Director, Research Services
Holdways

Helen Liu
Director and General Manager
Holdways

+86 10 5128 4009 Ext 805


huzq@holdways.com

+86 10 5128 4009 Ext 812


liusj@holdways.com

Jacky Wei
Senior Manager, Research &
Consultancy, Beijing
Knight Frank

+86 10 8518 5758 Ext 816


jacky.wei@cn.knightfrank.com

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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