Following some policy-induced tough times during 2012, China’s major real estate developers are outpacing their sales targets so far in 2013, with overall revenue growth approaching 30 percent for the year.
Big industry names such as China Vanke, Country Garden Holdings, Greenland Group, China Overseas Land and Poly Real Estate are all outperforming their expectations according to reports from the Macquarie Securities and the China Real Estate Information Corp.
The resulting optimism is helping to fuel record land sales revenues for local governments as well as providing capital for the some of the developers’ overseas acquisitions.
Average Sales Up Nearly 30 Percent
According to a report last week by Macquarie, among 27 major mainland developers who had reported their sales through September, the average sales increase was 29 percent, and average selling prices had gained 10 percent.
Thanks in part to looser enforcement of government regulations designed to cool the housing market, as well as to continued public demanding for property investments, Country Garden and China Overseas Land had already nearly reached their sales goals for all of 2013 by the end of September. Many other firms have already surpassed more than 70 percent of their annual targets going into the traditionally strong fourth quarter.
Performance of the Industry Leaders
Shui On Land led the industry with a 239 percent revenue surge, and Country Garden has seen a 119 percent rise in sales receipts.
In real terms, revenues for the major developers have been impressive, with two firms already surpassing RMB 100 billion for the year. Here’s a quick list of major developers and their January-September revenues, as reported by China Real Estate Information Corp.
- China Vanke – RMB 127.9 billion
- Greenland Group – RMB 101.2 billion
- China Overseas Land and Investment – RMB 90 billion
- Poly Real Estate Group – RMB 89.55 billion
Developer Performance Driving Land Sales
Some market analysts now estimate that revenue growth for China’s top 10 developers will average 20 to 30 percent this year, and this strong performance is helping to drive demand for more development sites.
Figures from the real estate information provider China Index Academy indicate that land transfer fees in 300 major China cities reached RMB 2.11 trillion by the end of September – a 70 percent rise from the RMB 1.23 trillion recorded during the same period last year.