china real estate market review and outlook · 2018-06-12 · housing enterprises: china real...

1

China Real Estate Market

Review and Outlook

China Index Academy

May. 2018

2

CHINA INDEX ACADEMY

Outline

1. 1. Review: Continued tightening of policies， Market volume drops

while price increases

2. 2. Outlook: Short-term regulation continues，Market differentiation；

Mid- and Long-term market still have great potential.

3

CHINA INDEX ACADEMY

Restriction Policies Tightened

the market concealed madness

4

23

44

23

14

610

26

-10

0

10

20

30

40

50

Yangtze River

Delta City Group

Pearl River Delta

City Group

Central and

Western Key Cities

Beijing-Tianjin-Hebei City Group

Distribution of cities with tightened policies since 2016

Policy Review

◆2016-2018 （to date）：

95 cities above the prefecture level(about 300 policies)

42 county-level cities(about 42 policies).

Around 30 cities issued relevant regulatory policies in

this March, April and May.

Hainan and Hebei were controlled comprehensively at

the provincial level.

Number of monthly Policies

in cities above the

Prefectural levelNumber of

policies issued

monthly in

country level

cities

5

Financial and credit policies play an

important role in regulation and

control, and will continue to tighten

the situation in the later period!

Financial

and

credit

policies

2016： Strict Control of Illegal Internet

Financial Business

2016-2017： Lower financial leverage

2016-2017： Differential credit

Increase payment ratio

2017 to now： Upward house purchase

loan interest rate

2018-2020: Financial risk prevention

and Lower financial leverage

Control of house prices

Demand

Housing Purchase Limits

Housing

Sales Limits

Housing

Loans Limits

Supply

Increase in

land supply

Set more restrictions in Land transfer

Rectifying the sales market

Housing

Price Limits

Assure basic needs are satisfied

Policy Review

6Real Estate Related Policy in the Two Conferences

Housing

system

Financial

regulation

Real estate

taxLong-acting

mechanism

Urban

agglomerations

Policy Review: The 19th National Congress of the Communist

Party of China

7

Policy tone

Short term:

strict implementationin 2018, control baseon classification

Medium term:

financial supervision isstrengthened, leverageis reduced, and thefinancial environment inthe industry is tight andunchanged.

Long-term:

Real Estate Tax Expedited and deepen Housing System reform

Promoting the Healthy Development

of the Real Estate Market

A steady and neutral monetary policy

2018.4.23

Political Bureau of the Central Committee

Policy Review

8

2018-2020："new housing reform cycle"

and major changes will take place in the

industry pattern.

Lease and sell;

Real estate tax;

Differential regulation

BUrbanization

Regional development

strategy for development;

Guangdong, Hong Kong and

Macau Tai Wan District;

New urbanization

A

Future Real Estate Market Patterns

The real estate market in first and second-tier cities

tends to be stable, and the real estate market in third and

fourth-tier cities in urban agglomerations will usher in

development opportunities.

Long-acting

mechanism

Policy Review

9

14194

0.43%

涨幅创新高Figure: Average price and ring ratio of 100-cities from 2011 to April 2018

Experience 37 consecutive months of raise;

Price was stabilized after regulation, and the monthly increase rate keeps within 1 % for 18 consecutive

months;

2017 cumulative increase rate: 7.15%;

January-April 2018 Cumulative increase rate:1.63%;

House Price

10

Figure: Trends in the prices of newly built houses in various cities since January 2013

TIME

Pearl

River

Delta(15)

Yangtze

River

Delta(26)

Bohai

Rim(20)

North

west(9)

North

east(7)

Middle

part(14)

Southw

est(9)

2011 4.95% 4.91% 6.34% 7.45% 5.86% 6.53% 4.63%

2012 -1.74% -4.18% 0.09% 0.72% 0.74% 0.78% -1.12%

2013 12.84% 5.71% 9.94% 7.29% 5.46% 9.18% 6.58%

2014 -3.81% -5.61% -1.90% -5.46% -6.14% -4.50% -5.27%

2015 5.54% 1.07% 2.14% -2.58% -2.41% 1.95% -3.45%

2016 22.02% 16.08% 13.06% 2.39% -0.60% 12.97% 6.07%

2017 8.00% 9.00% 10.05% 7.43% 9.72% 10.43% 14.14%

2018:1-4 1.95% 2.17% 2.19% 2.27% 2.59% 3.40% 4.12%

-2%

-1%

-1%

0%

1%

1%

2%

2%

3%

3%

4%

4%

13-04

13-06

13-08

13-10

13-12

14-02

14-04

14-06

14-08

14-10

14-12

15-02

15-04

15-06

15-08

15-10

15-12

16-02

16-04

16-06

16-08

16-10

16-12

17-02

17-04

17-06

17-08

17-10

17-12

18-02

18-04

一线城市二线城市三线城市

First-tier

cities

Second-

tier city

Third-tier

city

0.80%

2.19%

2.57%

9.03%

1.06%

0.05%

2.29%

3.31%2.59%

2.88%

3.73%3.05%

2016:1-4 2017:1-4 2018:1-4 2016:1-4 2017:1-4 2018:1-4 2016:1-4 2017:1-4 2018:1-4

House Price

11

Figure: Monthly turnover trend of 50 representative urban commercial residential houses from May 2015 to April 2018

National Commercial Housing：2017 Cumulative sales area is 16.9 Billions of

square meters ， Growth y-o-y 7.7% ， A record high in scale.

Commodity housing of 50 Key cities: January-April 2018, Average monthly sales area is

2553 Square meters ， Decline y-o-y 14.5%↓；

15/05

15/06

15/07

15/08

15/09

15/10

15/11

15/12

16/01

16/02

16/03

16/04

16/05

16/06

16/07

16/08

16/09

16/10

16/11

16/12

17/01

17/02

17/03

17/04

17/05

17/06

17/07

17/08

17/09

17/10

17/11

17/12

18/01

18/02

18/03

18/04

万平方米

月度成交面积 1-4月月均成交单月同比

House Demand

12

Figure: April 2010-April 2018 Average monthly sales area of representative urban commercial residential buildings

0

20

40

60

80

100

120

140

万平方米

一线二线三线

House Demand

January-April 2018 Average monthly sales area

Decline y-o-y 36.1%↓

（ Beijing and Shanghai ）


（ Haikou： Decline 80% ↓

Tianjin 、Xiamen Decline 40% ↓ ）


（ Quanzhou ： Growth 80%

Yangzhou Growth 20% ）

13

Housing Stock

Figure: Average prices of housing stock in the main urban areas of the top ten cities and the trend of the rise and fall of the ring ratio

Figure: The number of housing stock transactions in the main urban areas of the top ten cities and the trend of y-o-y

increase and decrease

January-April 2018 ，Cumulative increase rate：

0.08%↑，

Beijing, Shanghai and Tianjin fell again in April.

2017， Cumulative increase rate：8.03%↑

DemandPrice

数据来源：CREIS中指数据，fdc.fang.com

元/

平方米

十大城市均价环比

万套

十大城市成交量（左）同比增长率（右）

January-April 2018， Sales: 307300 units

Decline y-o-y ：14.58% ↓ ，Beijing Decline y-o-y ：40% ↓.

2017， Sales: 1002000 units， Decline y-o-y ：35% ↓

Beijing, Shanghai Decline y-o-y ：50% ↓

14

Housing enterprises

In 2017， Number of real estate enterprises with sales over ¥ 10 billion ：144，

Market share over 60% ;

From January to April 2018, the average sales of enterprises with sales over ¥ 10 billion is

¥ 39.5 billion；the average sales of Country Garden, Evergrande, and Vanke is

¥ 221.69 billion .

55005238 5151

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

0

1000

2000

3000

4000

5000

6000

碧桂园

万科

恒大

融创

保利

绿地

中海

龙湖

华夏幸福

绿城

金地

华润置地

新城

招商

泰禾

万达

销售额同比增长率

Figure: Sales of 100 Billion Housing Enterprises in 2017

15

Housing Enterprises: China Real Estate Top 100 Companies

2016China's top 100

housing companies

Average sales

5.87Billion

48Billion

1.4Trillion

11.76Trillion

2016New housing in

the United Statessales volume

2016Top 100 housing companies in the

United StatesAverage income

2016Chinese

commercial housing

sales volume

The market share of China's

top 100 housing companies

will be higher:

The top 10 companies in Japan and

Hong Kong already account for only 40

% and more than 80 % of the total.

16

CHINA INDEX ACADEMY

Future Trends in The Real Estate Market

17

6 Modules

binding Fang.com Big data

platform resources

22 equations

60 indexes

1000 Multiple Data Items

20 years historical data

2018 Market Forecast: The economy, income, policy, currency,

capital and population are the main external factors affecting the

real estate market

Data Source: China Index Academy Research Institute

Commodity housing

demand

Commodity housing

price

Commodity housing

supply

Developing

Investment

Urban

population

New

Currency

Enterprise

funds

Money

supply

Resident

incomePolicy

Economic

growth

0.7 0.3 0.6

0.40.60.6

0.2

0.2

Land

Demand

0.3

Figure: Main External Factors Affecting Real Estate Market

18

The economy : A good start and expected to perform weaker

than the first quarter, but the overall volatility was small

Figure: Growth trend of three major demand since the second half of 2010


In the first

quarter

Industrial production, investment, exports and other economic indicators have all

accelerated. GDP grew by 6.8 % y-o-y.

Supply-side reforms continually push the domestic economy toward high-quality

development.

In the second

quarter

Industrial production and consumer consumption will continue to grow rapidly, and

uncertainties such as investment and exports may affect the economic

performance. However, the overall volatility is not expected to be large.

-20%

-10%

0%

10%

20%

30%

40%

消费品零售总额累计同比固定资产投资累计同比出口累计同比

Total retail sales of consumer goods

Investment in fixed assets

export

19

The total transaction volume on "Double 11" shopping festival in 2017 reached 168.2 billion yuan, with an

increase of 39.4 %, surpassed the "Cyber Monday" in the United States as the world's most important

and largest online shopping festival.

The New Economy Plate is brewing: Upgrade of

Consumption Injects New Vitality

-20%

-10%

0%

10%

20%

30%

40%

Figure: Total sales of social retail products in China since 2015 Figure: Total turnover of "Double Eleven" Alipay since 2009

1682.7

267%

90%

58% 60%

32%39%

0%

50%

100%

150%

200%

250%

300%

0

200

400

600

800

1000

1200

1400

1600

1800

2009年 2010年 2011年 2012年 2013年 2014年 2015年 2016年 2017年

双十一支付宝总交易额（亿元）增长率

20

The government's support for innovation is constantly being strengthened, and Premier Li Keqiang has

continuously set the stage for "public innovation and entrepreneurship".

China ranked 22nd in the new 2017 world innovation index. According to CB Insight, China is the country

with the largest number of unicorns outside the United States.

资料来源：CB Insight资料来源：MIT Technology Review

Table: 2017 World Innovation Index ListFigure: New "Unicorn" company distribution over the years

0%

12%

28% 29%36%

75%

62%

49% 43%

41%

25% 26% 23%28%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013年 2014年 2015年 2016年 2017年

中国美国其他国家

The New Economy Plate is brewing: Chinese technology

begins to take the leading place

21

Monetary policy continues to be neutral and M2 growth rate

fluctuates in the low range

Figure: Growth trend of M1 and M2 in China since March 2008


Financial

environment

In March 2018, the M2 grew 8.2 % y-o-y and recovered slightly for two consecutive

months; indicating that financial deleveraging and strict supervision continued to

advance, and that the internal flow of funds in the financial sector remained poor.

Monetary

policy

direction

In the first quarter, when the Fed started raising interest rates for the first time in

the year, the central bank immediately raised the rate of reverse repurchase.

Directly increase the financing costs of the real estate industry. The goal of neutral

regulation of monetary policy will not change in the short term.

0%

10%

20%

30%

40%

50%

08-03

08-05

08-07

08-09

08-11

09-01

09-03

09-05

09-07

09-09

09-11

10-01

10-03

10-05

10-07

10-09

10-11

11-01

11-03

11-05

11-07

11-09

11-11

12-01

12-03

12-05

12-07

12-09

12-11

13-01

13-03

13-05

13-07

13-09

13-11

14-01

14-03

14-05

14-07

14-09

14-11

15-01

15-03

15-05

15-07

15-09

15-11

16-01

16-03

16-05

16-07

16-09

16-11

17-01

17-03

17-05

17-07

17-09

17-11

18-01

18-03

MI同比 M2同比

22

Financing difficulty of real estate enterprises has risen

significantly, the pressure on residents to buy houses also increase

continually

Figure: Trends in the balance of loans, real estate loans and individual housing

loans in China since 2013Figure: China's first and second mortgage interest rates since February 2016


Loan growth fell: the balance of loans for real estate and personal home purchases at the end of

2017 was 6.1 、14.5 percentage points lower than at the end of 2016.

Loan interest rate is raising：According to financial 360 data, in March 2018, the National loan

interest rate for the first and second home buyer rose slightly to 5.51 % and 5.86 % respectively.

0%

10%

20%

30%

40%

0

10

20

30

40

万亿

房地产贷款余额个人购房贷款余额

各项贷款余额增速(右）房地产贷款余额增速（右）

个人购房贷款余额增速（右）

4%

5%

6%

16-02

16-03

16-04

16-05

16-06

16-07

16-08

16-09

16-10

16-11

16-12

17-01

17-02

17-03

17-04

17-05

17-06

17-07

17-08

17-09

17-10

17-11

17-12

18-01

18-02

18-03

首套房平均利率二套房平均利率

mortgage rates for first home buyer

mortgage rates for second home buyer

23数据来源：中国指数研究院测算

• GDP grows 6.7 % ；

Research assumptions

Assumption 1

• M2 grows 10.1% 、 RMB Loan

Balance growth 11.9%， New loans

About 14.2 trillion yuan ；

• Baseline interest rate unchanged in

2018， Tighter credit policies in hot

cities ；

Forecast results

15.0~15.4 Billions of square meters，

-11.3%~-9.3%↓

7892~8050 yuan per square meter ，

0%~2.0%↑

11.5~11.8 Trillions of yuan ，

5.1%~7.1%↑

18.7~19.0 Billions of square meters，

4.5%~6.5%↑

Commodity housing

Demand

Real estate

development

Investment

• Due to the city's policy, it urged the

real estate market to return to

stability and rationality.

2018 Market Forecast: Transaction falls, price stabilizes, new

construction and investment grow in middle and low speed

Assumption 2

Assumption 3

Assumption 4

Commodity housing

Price

Commodity housing

Supply

24

图：2017年-2018年3月各线城市商品房销售面积同比增速


Sales will fall overall, greater regulatory pressure for second-tier

cities

limited room for adjustment, The market

gradually stabilizes

Regulatory policies are emerging, and some

cities are under downward pressure.

Sales area, sales growth continued to slow

or showed a slight decline

First-tier

cities

2018

2017First-tier

cities

Second-tier

city

Third-tier

city

sales

Area

0.5Billions of square

meters

（-29.2%↓）


meters

（1.5%↑）


meters

（13.9%↑）

sales

volume

1.3Trillions of yuan

（-26.1%↓）


（13.6%↑）


（27.7%↑）

January-April 2018

National sales area ：4.2 Billions of square meters，y-o-y

1.3%↑ National sales ：3.6 Trillions of yuan， y-o-y 10.3%↑

2017

-11.0%

-18.8%

-25.3% -25.5%-28.1% -28.2%

-30.3% -31.1% -30.2% -29.2% -30.1%

8.8%4.7% 3.8%

8.1%6.0% 4.7% 2.9%

0.8% 1.2% 1.5% 0.7%

29.0%25.7% 24.5% 24.5%

22.5% 21.0%18.1%

15.8% 14.7% 13.9%

7.3%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2017:1-3 2017:1-4 2017:1-5 2017:1-6 2017:1-7 2017:1-8 2017:1-9 2017:1-10 2017:1-11 2017:1-12 2018:1-3

一线城市二线城市三四线城市

First-tier cities

Second-tier city

Third-tier city

Second-tier

cities

Third-tier

cities

25

Price: the number of cities implement regulatory policy

will increase continually, the overall price of the country

will remain stable


Figure: The price index of 100- CitIes and the sales area of

commercial housing in April 2012-2018 trend y-o-yPolicy regulation

restricted purchase, limited lending and limited sale

Moderately Neutral Monetary Policy and Tightening

Credit Environment

Market factors

• First tier city： Sales are back on the mend, prices

are holding steady.

• Second tier city ： Some of them are under

downward pressure and prices are facing

adjustment.

• Third tier city：Sales growth slowed and prices

stabilized or edged down

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

-10%

-5%

0%

5%

10%

15%

20%

25%百城价格指数单月同比（左）商品房销售面积同比（右）

26

2018-2020： The total demand for new housing exceeds

5.5 billion square meters, commercial housing is about 3.5

billion square meters.

Index2001-2005

Total

2001-2005

Composite

growth

rate(%)

2006-2010

Total

2006-2010

Composite

growth

rate(%)

2011-2015

Total

2011-2015

Composite

growth

rate(%)

2016-2017

Total

2018-2020

Total

Sale area

(亿M2)15.7 24.5 36.4 13.5 52.6 3.3 28.2 35.4

数据来源：中国指数研究院测算，fdc.fang.com

① Residential demand from the new urban population is the highest, accounting for

about 40.1 % ， due to the slowdown in urbanization, this share is declining ；

② The proportion of improved housing demand based on the improvement of the

quality of life will remain stable, accounting for about 26.2 %;

③ The proportion of needs from demolition and renovation will continue to increase,

accounting for about 33.7 % 。

Commercial

housing

Demand

3.5 billion

square meters

27

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china real estate market review and outlook · 2018-06-12 · housing enterprises: china real...

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