Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

Quickening Home Sales Drove China Property Investment to 16-Month High in August

2020/09/17 by Elizabeth Kerr Leave a Comment

huaihai road

New World Development agreed to pay RMB 4.1 bil for a Shanghai site last month

After a gruesome start to the year, home sales in China continued to climb in August, and the country’s developers are responding by pouring more money into the sector, according to official data published this week.

Sales of new real estate on the mainland, primarily housing, grew by 1.6 percent in August compared to the same month last year, with the value of new homes sold during 2020 reaching nearly RMB 9.7 billion, according to the National Bureau of Statistics. August brought the sixth straight month of growth in the home business after the market came to a near halt in January and February during the coronavirus pandemic.

Yardi Proptech Report

The nation’s builders reacted to the upswing in housing demand by investing RMB 8.84 trillion ($1.3 trillion) into real estate development across the country during the first eight months of this year, according to the government data. That amount was 11.8 percent more than the investment level in August 2019, and the quickest rate shown in the official data in 16 months.

Despite the upturn in the residential sector, however, both investment and sales were down in the commercial segment, with developers remaining wary of new office and retail projects.

Home Prices Rise 0.6%

Home buyers in China scooped up RMB 1.55 trillion in new housing during August, according to Mingtiandi calculations based on government data, with that amount up by 6.4 percent compared to the RMB 1.45 trillion sold one month prior.

sales chart 2020-09-17

Source: National Bureau of Statistics

That increase in sales only nudged housing costs up fractionally, however, with the average cost of homes across 70 cities tracked by the Statistics Bureau up by 0.6 percent compared to July. That rate was up by 4.8 percent compared to August 2019, the data showed.

Markets have been trending steadily northward since April, thanks in part to more accommodating monetary policy and relaxation of home purchase restrictions earlier in the year, as local governments and central authorities moved to ensure ongoing economic activity in the wake of the COVID-19 crisis.

Data Centre Forum

Developers have also been taking steps to lure buyers into the market, with China Evergrande this month offering 30 percent discounts on new homes nationwide — the biggest sales incentive program ever by one of the country’s top builders.

Govt Clamps Down

The rebound in China’s property market already seems to be a concern for the government with the People’s Bank of China, together with the country’s primary regulator of the real estate market, last month rolling out new rules designed to restrict access to credit and reduce risks of default.

nbs chart 2020-09-17

Source: National Bureau of Statistics

In a set of measures still being formalised, China’s central bank, together with the Ministry of Housing and Urban-Rural Development (MOHURD), aim to cap lending to overleveraged developers as competition at land sales has heated up since April of this year.

Executives from key developers have been called in for meetings with local authorities, with officials advising builders of the need to keep debt under control.

Office Investment

The government statistics released this week showed that developers raised RMB 11.7 trillion in new funding from January through August, an increase of 3 percent over the same period in 2019. Of that funding, domestic loans grew by 4.0 percent, while overseas borrowing jumped by 24.5 percent to reach RMB 10.1 billion over the period.

Commercial Suffers from Oversupply

While builders have been rushing into residential projects, enthusiasm for commercial developments has been dimmer, with RMB 3.82 trillion invested in office developments in the period from January through August. That amount was down by 1.0 percent compared to the same period in 2019.

JLL Jim Yip

JLL China capital markets chief Jim Yip says investors are still cautious on commercial projects

“China’s major cities are facing a strong supply cycle in the office sector, and with the impact of the epidemic on China superimposed, investors are relatively cautious in their investment sentiment,” said Jim Yip, head of capital markets for JLL China.

On the retail side, investors have been still more reluctant to commit their cash, with total investment through August of this year reaching RMB 8.21 trillion — down by 2.9 percent compared to the first eight months of 2019.

Not all developers have been staying on the sidelines, however, as Hong Kong’s New World Development last month agreed to spend RMB 4.1 billion to acquire a commercial project on Shanghai’s Huaihai Road, with a plan to develop a mixed office and retail project on the site near Xintiandi.

Just today, Shenzhen-based China Evergrande adding one more project to Shanghai’s tally for the year, when it agreed to pay RMB 2.3 billion to acquire a site for a mixed-use project in the city’s Hongkou district.

Related Stories

  • GLP Hires Former Blackstone China Real Estate Boss Tim WangGLP Hires Former Blackstone China Real Estate Boss Tim Wang
  • JD Announces Plan for Potential $5B Logistics IPO in Hong KongJD Announces Plan for Potential $5B Logistics IPO in Hong Kong
  • Keppel Launches First China Logistics Property Fund With $220M CommitmentKeppel Launches First China Logistics Property Fund With $220M Commitment
  • Singapore’s CDL Warns of Loss After China Developer Investment Swells to $1.4BSingapore’s CDL Warns of Loss After China Developer Investment Swells to $1.4B

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Research & Policy Tagged With: China, China home prices, daily-sp, Featured, highlight, Jim Yip, National Bureau of Statistics

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get Mingtiandi Delivered

Multi-Family Forum

MTD TV

Gaw Kailong Cushman & Wakefield value add panel

China’s Value-Add Arena Set to Reward Investors With Local Presence: Watch on MTD TV

MTD TV proptech show

COVID-19 Accelerates Proptech Adoption in Asia: Watch on MTD TV

More MTD TV Videos

Latest Stories

Darren Searle Logos

KKR, Abu Dhabi Fund Back A$1B Logos Development Venture in Australia

Wang Jianlin Sun Hongbin Li Sze-Lim

Wanda Topped Mainland Commercial Developers Again in 2020 Despite 13% Income Drop

crown sydney

Blackstone Ties $6B Crown Offer to Licences and More Asia Real Estate Headlines

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

Data Centre Startup Princeton Digital Lands $230M in Financing as China…Data Centre Startup Princeton Digital Lands $230M in Financing as China Platform Grows

Sun Hung Kai & Co Launches $300M Debt Vehicle to Grow Fund…Sun Hung Kai & Co Launches $300M Debt Vehicle to Grow Fund Management Business

Hongkong Land Leases Exchange Square Floors to S&P Despite Central…Hongkong Land Leases Exchange Square Floors to S&P Despite Central Market Slide


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Asia Value-Add Forum 2021
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team