phat dragon the real estate chart pack july 2013

7/28/2019 Phat Dragon the Real Estate Chart Pack July 2013

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3/33

Contributions to year-ended investment growth

-20

-15

-10

-5

0

5

10

15

-5

0

5

10

15

20

25

30

Sep-05 Sep-07 Sep-09 Sep-11

pptppt

Hard infrastructure (lhs)Real estate (rhs)Heavy industry (rhs)

Sources: CEIC,Westpac Economics


4/33

Contributions to Chinas investment growth

-6

-3

0

3

6

9

12

15

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

ppt

InfrastructureReal estate


Contribution to year-ended growth rate


5/33

Investment shares by category

Hardinfrastructure

Heavyindustry

Lightindustry

Real estate

Softinfrastructure

Extraction

Other

Sources: CEIC, Westpac.

Total nominal urban fixed investment Construction subset

Residential

Non-residential

Transport

Utilities


6/33

70 city house prices: NEW m/m change

-100-80-60

-40-20

020

406080

100

0

10

20

30

40

50

60

70

Feb-11 Aug-11 Feb-12 Aug-12 Feb-13

Net % of cities No. of citiesNumber increasing (rhs)Number declining (rhs)Net % Rising (lhs)


6


7/33

70 city house prices: secondary m/m change

-80

-60

-40

-20

0

20

40

60

80

100

0

10

20

30

40

50

60

70


Net % of cities No. of citiesNumber increasing (rhs)Number declining (rhs)Net % Rising (lhs)


7


8/33

70 city house prices: net balance m/m change

-80

-60

-40

-20

0

20

40

60

80

100

-80

-60

-40

-20

0

20

40

60

80

100


Net % of cities Net % of citiesNew

Secondary market


8


9/33

Chinese land prices

-10

-5

0

5

10

15

20

25

-10

-5

0

5

10

15

20

25

Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12

%yr %yr TotalCommercialIndustrialResidential

Sources: CEIC, Westpac Economics.Land prices are a spliced series for 70cities up to Dec-10 and 105 cities since.


10/33

Chinese land prices: total & residential

-10

-5

0

5

10

15

20

25

-10

-5

0

5

10

15

20

25

Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12

% 6mthannualised% 6mthannualised

Total

Residential



11/33

Chinese real investment & land prices

-14

-7

0

7

14

21

0

10

20

30

40

50

Mar-05 Mar-07 Mar-09 Mar-11 Mar-13

%yr %yr

Construction

EquipmentTotalCommercial land prices



12/33

Housing and auto sales

-50

-25

0

25

5075

100

125

150

-50

-25

0

25

5075

100

125

150


%yr %yr

Auto sales

Housing sales

Sources: CEIC, Westpac Economics.


13/33


14/33

House sales: national volume, regional values

-50-250

255075100

125150175200

-50-25

0

255075

100

125150175200


%yr %yr Centre (value)

East (value)

West (value)

National volume smoothed



15/33

Commercial & off market urban housing

-20

0

20

40

60

-20

0

20

40

60

Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

%ytd%ytdMarket residential (42%)

Non-market residential (8%)

Sources: CEIC, Westpac Economics. End 2011shares of total urban construction in parentheses.


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Non-residential urban construction

-20

0

20

40

60

-20

0

20

40

60


%ytd%ytdMarket non-res. (14%)

Non-market non-res. (36%)

Sources: CEIC, Westpac Economics. End 2011shares of total urban construction in parentheses..


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Commercial & off market urban construction

-20

0

20

40

60

-20

0

20

40

60


%ytd%ytd Market res. (42%)Market non-res. (14%)

Non-market res. (8%)

Non-market non-res. (36%)

Sources: CEIC, Westpac Economics. End 2011 shares in parentheses.


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Commercial & off market construction

-10

0

10

20

30

40

50

-10

0

10

20

30

40

50


%ytd%ytdCommercial developersOff market

Sources: CEIC, Westpac Economics. Off-market construction is about 38% of total, and is mostly non-residential.Government departments, quasi-government agencies and state owned companies are the main investors. Now as in09, the off-market sector is playing a key role in supporting overall construction growth.


19/33

Commercial & off market housing construction

-10

0

10

20

30

40

50

-10

0

10

20

30

40

50


%ytd%ytdCommercial developersOff market

Sources: CEIC, Westpac Economics. Off-market housing construction is about13% of total housing. Residential thus comprises 20% of the off-market total.


20/33

Commercial & off market housing construction

-60-45-30

-1501530

45607590

-60-45-30

-150

1530

45607590


%yr %yr Commercial developersOff market

Sources: CEIC, Westpac Economics. Off-market housing construction is about13% of total housing. Residential thus comprises 20% of the off-market total.Data is 3mma of yoy % growth.


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23/33

Land purchased: national & by region

-60

-40

-20

0

2040

60

80

100

-60

-40

-20

0

2040

60

80

100


%yr %yr

Central East

West National



24/33

Real estate: key demand & supply parameters

50

100

150

200

250

300

50

100

150

200

250

300

Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13

indexindex

CompletionsSalesStarts

Sources: CEIC, Westpac. Aug-2006 = 100.Underlying data in sqm.


25/33

Housing starts and real estate investment

-15

0

15

30

45

60

75

-15

0

15

30

45

60

75

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

%yr %yr Starts 3mths prior

Real estate FAI

Sources: CEIC, Westpac.Underlying data in sqm.12 month average of raw oya growth rate.


26/33

Sales volumes lead starts by 6 months

-30

-15

0

15

30

45

60

75

-30

-15

0

15

30

45

60

75


%yr %yr Sales 6mths prior

Starts



27/33

Residential sales & starts: volumes

-45

-30

-15

0

15

30

45

60

7590

-45

-30

-15

0

15

30

45

60

7590


%yr %yr Sales

Starts

Sources: CEIC, Westpac.Underlying data in sqm.Raw oya growth rate.


28/33

Starts lead completions by 1 to 2 years

-30

-15

0

15

30

45

60

75

-30

-15

0

15

30

45

60

75


%yr %yr

Starts 20mths prior

Completions



29/33

Housing completions and sales: volume

-30

-15

0

15

30

45

60

75

-30

-15

0

15

30

45

60

75


%yr %yr Sales

Completions



30/33

Real estate loans outstanding

0

5

10

15

20

0

5

10

15

20

Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13

%GDP %GDP

Trusts to real estateBanks to DevelopersMortgages


31/33

Property developer finance by source

15

20

25

30

35

40

45

15

20

25

30

35

40

45

Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

%% "Self raised"Down payments and sales revenue

Loans

Sources: CEIC,Westpac Economics.

Consistent tighteningof monetary policy

Consistent tighteningof monetary policy


32/33

Property developer finance: growth by type

-50

-25

0

25

50

75

100

125

-50

-25

0

25

50

75

100

125

Dec-04 Dec-06 Dec-08 Dec-10 Dec-12

%yr %yr "Self raised"

Loans

Down payments and sales revenue

Total

Sources: CEIC,Westpac Economics.


33/33

The key messages reiteratedOverall growth in fixed real estate investment looks to be levelling off in the 20-21%ytdarea, versus the lows in the 15-16% region in 2012Q3.

The heat is coming out of housing prices in response to tightening measures earlier in theyear, with the slowdown more pronounced in the secondary market rather than in newdwellings. Land prices are grinding higher, with residential land the best performedcategory. By region, housing sales are slowing most rapidly in the East, where therebound was most pronounced.

New housing starts continue to undershoot the lead implied by the rebound in sales,despite developers balance sheets looking much better than a year ago. The effort toclear inventories has obviously taken most of their energy. Repressed turnover in theland market supports this interpretation.

Credit demand from households has been sound, although survey data suggests housepurchase plans have diminished.

Commercial non-residential construction has settled into a 20% groove, while off-marketconstruction is slowing sharply in both res. and non-res. SOE investment has slowedsharply since late 2012.

phat dragon the real estate chart pack july 2013

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