China has seen a marginal y-o-y 0.9% dip in newly-started real estate construction over Jan-Jul’21 to 118.48 million square metres (msm). Also, the area of land purchased for real estate development in this period has seen a y-o-y drop by 9% to 87.64 msm; the transaction price of land purchased also dipped 5% to 512.1 billion yuan over this period.
Alos, in Jul’21, China’s total area of commercial housing for sale dropped by 2.15 msm to 50.864 msm compared to Jun’21. Residential buildings sales area also dropped by 2.7 msm m-o-m while that of office buildings decreased by 260,000 sqm. However, the area for sale of commercial buildings rose 190,000 sqm m-o-m.
Also, domestic and overseas borrowings for funding real estate construction have dropped y-o-y in the first seven months of the current calendar.
Investments rise 13%
China’s investment in the real estate sector over Jan-Jul’21 was 8489.5 billion yuan, an increase of 13% y-o-y, an increase of 17% over the Jan-Jul’19, and an average increase of 8% over the two years, as per statistics unveiled by the country’s National Bureau of Statistics. Investment in the residential space was 6,398 billion yuan, an increase of 15% y-o-y.
Regionwise: Investment in real estate development in the eastern region over Jan-Jul’21 was 4,530.6 billion yuan, a y-o-y increase of 12%; in the central region, at 1,772 billion yuan, up 20%; in the western region, at 1,872 billion yuan, an increase of 10%; and the north-eastern region saw an increase of 8% to 315.2 billion yuan.
Property sales increase
From Jan-Jul’21, the total area of properties sold amounted to 1,0648 msm, a y-o-y increase of 22%; an increase of 14.5% compared to Jan-Jul’19, and an average increase of 7% over these two years.
Sale area of residential buildings increased 23%, of office buildings by 6.3%, and of commercial buildings by 4% over Jan-Jul’21. Commercial property sales amounted to 10.643 billion yuan, an increase of 31%; an increase of 28% over the first seven months of 2019, an average increase of 13% over the two years. Residential sales increased 33%, office building sales increased 9%, and commercial building sales rose 5%.
Region-wise: Sale area of commercial properties in the eastern region was 428.41 msm, a y-o-y increase of 24%; sales amounted to 6,194.3 billion yuan, an increase of 37%. Sale area of commercial housing in the central region was 283.59 msm, up 27% while the sales amount was 2142.2 billion yuan, up 33%. Commercial property sale area in the western region was 269.65 msm, rising 14% while sales amounted to 2015.6 billion yuan, up 16%. The north-east region saw sale area rising 9% to 34.83 msm while the sales volume rose 7% to 291 billion yuan.
Floor space under construction
The floor space under construction over the first seven months of calendar 2020 was 8918.8 million square metres (msm), up 9% y-o-y. In this, the share of residential construction was 631.72 msm, an increase of 9.4%. However, the floor space of newly-started real estate construction saw a marginal drop of 0.9% to 118.48 msm, although the share of newly-started residential area comprised 884.74 msm, a marginal increase of 0.4%.
The floor space of completed real estate construction was 417.82 msm, an increase of 26%. The share of completed residential properties rose 27% to 301.25 msm.
Domestic, overseas borrowing drop
Borrowings for real estate development over Jan-Jul’21 were at 11,897 billion yuan, an increase of 18% y-o-y; an increase of 19% over the same period in 2019, and an average increase of 9% over the two years. Among them, domestic loans amounted to 1.540 trillion yuan, showing a decline of 4.5%; foreign capital borrowings were at 4.4 billion yuan, a decrease of 44.4%. But, self-raised funds were at 355.3 trillion yuan, an increase of 11%.
~Madhumita Mookerji
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