REAL ESTATE MARKET OF CHINA
Reasons for Growth
Reform of China’s real estate sector did not take place until the late 1990s. Prior to
that time, most of China’s urban population relied on the State for housing. Ownership of
real property rested in the State, and property development was the responsibility of the State.
However, starting in the early 1990s, China’s housing system began to transit to a market
driven system.
A brief timeline of housing reforms is as follows:
Year Event
1988 Amended constitution to permit transfer of land use rights
1991 Employer/employee-funded housing provident funds commenced
1992 Public housing commenced to be sold off in major cities
1995 Regulations issued regarding sales and pre-sales of real estate, setting forth a framework for real
estate sales
1998 Abolition of State-allocated housing
1999 Maximum mortgage terms extended to 30 years and maximum finance increased to 80%
Formalized procedures for the sale of real property in secondary market
2000 Regulations issued to standardize quality of construction projects, setting forth a framework for
the administration of construction quality
2001 Shanghai become first Chinese city to eliminate dual pricing for domestic and overseas home
buyers, and Beijing to follow in 2003
Regulations issued to strengthen the administration of demolition and relocation in urban areas
2003 Strengthened administration of real estate loans (to reduce risk of banks regarding real estate bank
loans and prevent continue overheating of investment in real estates)
Notice issued by the State Council for sustained and healthy development of real estate market
2004 Regulations revised to prevent transfer of apartment units before land use rights certificates for
such units are issued (to slow down property speculations)
For details of the regulations published between 2001 and 2004, please refer to
“Regulatory Overview – []” in Appendix [IX] to this Circular.
The housing reforms promoted private home ownership, development of the
mortgage market and the liquidity of the secondary property market. The State-allocated
housing system was abolished in 1998, and workers were allowed to purchase the properties
that they were living in at a discount. To assist the workers in acquiring the home ownership,
the home mortgage market was relaxed, and bank loans were more easily available to
individual home purchasers. Around the same time, procedures for the re-sale of properties
were formalized. By [2001], people in most cities of China were no longer subject to a
regulatory lock-up period on re-sale of properties.
All of these reforms, together with the continued macro-economic growth of China,
the rise of middle-income families and the demand for improved living standards, as well as
the increasing pace of urbanization and large-scale city re-development, are key growth
drivers in China’s real estate market. According to the United Nations Development
Program Human Development Report 2003, China’s urbanization rate was expected to reach
% by 20 一五 . The expected increase of China’s urban population is likely to create
significant demand for housing. The government estimates that billion . GFA of
new housing will be needed nationwide by 2010 in order to meet new demand from new
urban residents, assuming average per capita living space GFA of 25 .. An additional 2.
一三 billion GFA will be required to increase average per capita living space to 25 .
per capita by 2010. The government estimates that another 11 billion . GFA of new
housing will be needed nationwide by 2010 to replace old housing stock. For figures on
China’s rising macro-economy, urban income level and urbanization rate, please refer to
“Industry Overview – Macro-economic Situation of China”.
Growth of Real Estate Market
According to the National Statistics Bureau, a total of approximately 322 million
. GFA was sold in China in 2003, and the total GFA completed in the same year was 325
million .. Such figures represented an increase of % and % from the relevant
figures in 2002. Approximately billion was generated from the sale of real
properties in China in 2003, which represents an increase of 34% from billion in
2002. The table below sets out figures showing total GFA completed, GFA sold and sales
volume generated during 1998 to 2003:
1998 1999 2000 2001 2002 2003
GFA completed (m2 million)
GFA sold (m2 million) 一八
Sales volume (RMB billion)
(Source: National Statistics Bureau)
According to the National Statistics Bureau, approximately RMB 1,010 billion was
invested in China’s real estate sector in 2003, which represented approximately 一八.3% of
China’s total investment in fixed assets in 2003 and an increase of approximately % from
2002. The table below sets out figures showing the total investment in selected segments of
the Chinese property market during 1998 and 2003:
1998 1999 2000 2001 2002 2003
Residential (RMB billion)
Office (RMB billion)
Commercial (RMB billion)
(Source: National Statistics Bureau)
The table below sets out the total sales volume of selected segments of the Chinese
property market during 1998 and 2003:
1998 1999 2000 2001 2002 2003
Residential (RMB billion)
Office (RMB billion)
Commercial (RMB billion)
(Source: National Statistics Bureau)
REAL ESTATE MARKET OF SHANGHAI
Shanghai is the financial center of China and the flagship of China’s economic
reform. It has an area of over 6,340 . and a population of approximately 17 million as
at the end of 2003. The table below sets out selected indicators of Shanghai’s economy:
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP (RMB billion) 76 246 290 336 369 404 455 495 541 625
GDP/Capita (RMB) 5,910 一
八,942
22,275 25,750 28,240 30,805 34,547 37,382 40,646 46,585
Per capita disposable annual
income (RMB)
2,一八 2 7,172 8,一五
9
8,439 8,773 10,932 11,7 一
八
12,883 一
三,250
14,867
Per capita savings (RMB) 1,965 10,728 14,340 20,917 一
八,161
19,778 19,098 22,619 36,842 45,123
(Source: [2003 年上海市国民经济和社会发展统计公报，上海市统计局))
High economic growth has contributed to the rapid development of Shanghai’s real
estate market. In 2003, Shanghai’s GDP reached RMB625 billion, and GDP per capita
reached RMB46,585. Shanghai outpaced the national GDP for eight consecutive years.
According to Shanghai’s Tenth Five Year Plan, the following targets are set to be
achieved in Shanghai between 2001 and 2005:
increase GDP to RMB730 billion by 2005 (growth of 9% to 11% per annum from
2001 to 2005);
cumulative investment in fixed assets amounting to RMB1,000 billion during the five
year period;
increase disposable income per person in urban areas to RMB 一五,000 by 2005; and
lower the unemployment rate in urban area to less than %.
Key Drivers for Shanghai Real Estate Market
The real estate sector was listed as one of the pillar industries for Shanghai under the
Tenth Five Year Plan, and over 60 million . GFA of new housing is expected to be built
between 2001 and 2005 pursuant to the plan. Various government policies were issued
aiming at encouraging spending in and increasing demand for Shanghai’s real estate market.
Total investment in the real property sector reached RMB 一 八 ,805 million for the first
quarter of 2004, accounting for % of Shanghai’s total investment in fixed assets during
the same period and representing an increase of % from the first quarter of 2003.
Annual disposable income per person averaged RMB14,867 in Shanghai in 2003,
which was approximately times that of 1990. Accordingly, more money was spent on
residential property in Shanghai. According to [the Shanghai Statistics Bureau, annual
spending per person on residential properties averaged RMB 12801 in 2003, which was
approximately times that of 1995. As the population of Shanghai becomes more
affluent, we believe their demand for higher living standards and environmental
consciousness should also increase as they seek higher quality properties and more spacious
living environments. According to the Shanghai Statistics Bureau, the average living area
per person in Shanghai has increased from . in 1996 to 一 三 .8 . in 2003.
According to the Tenth Five Year Plan, by 2005, the average living area per person in
Shanghai will reach 一八 to 20 .. Accordingly, more properties are required to meet the
demand.
In addition, many multi-national corporations have established their China regional
headquarters in Shanghai. In 2003, contracts of over US$ billion in value were entered
into with foreign investors in Shanghai. The Influx of foreign capital and expatriate
population will further increase the demand for high-quality properties in Shanghai. The
1 Spending 11,416 out of 14,867 on real properties? Hans to confirm.
speed of city re-development also affects demand for real properties. In 2003, over
4,754,700 . were demolished in Shanghai. These factors contribute to an increase in
demand for real properties in Shanghai.
Growth of Shanghai Real Estate Market
According to the Shanghai Statistics Bureau, a total GFA of approximately
23,764,000 . was sold in 2003 in Shanghai, which represents an increase of % from
that of 2002. Approximately 3,450,200 . were sold in the first quarter of 2004, which
represents an increase of % from the same period in 2003. We have set out below a
table showing total GFA completed and total GFA sold in Shanghai from 1999 to 2003,
reflecting supply and demand in the Shanghai property market:
1999 2000 2001 2002 2003
GFA completed (m2 million)
GFA sold (m2 million) 一三.3 一五.6
(Source: [Shanghai Statistics Bureau])
[China’s residential market can broadly be divided into four segments: low-end,
mid-tier, upper-mid tier and high-end. In Shanghai, properties sold at over RMB10,000 per
. with an average price of approximately RMB 一 五 ,000 per . are regarded as
high-end properties. Last year, a total of million . of high-end properties with the
value of approximately RMB billion were sold in Shanghai, representing some 19% of
the entire Shanghai real estate market in terms of sales ]
Revenue of approximately RMB121,634 million was generated from the sale of real
properties in Shanghai in 2003, which represents an increase of % from 2002.
Approximately RMB110,986 million was generated from the sale of residential properties,
which represents an increase of 50% from 2002. The average selling price per . also
increased from RMB 3,102 in 1999 to RMB [5,1 一八] in 2003. We set out below a table
showing the total sales volume and average selling price per . of real properties in
Shanghai from 1999 to 2003:
1999 2000 2001 2002 2003
Sales volume (RMB billion)
Average selling price per m2 (RMB) 3,102 3, 3, 4, [5,1 一八]
(Source: [])
2 Management to confirm source of inform.
REAL ESTATE MARKET IN BEIJING
Beijing is the capital city of China and a major economic and cultural center. It
has an area of over 16,800 . and a population of approximately 一三.82 million as at the
end of 2003. The table below sets out selected indicators of Beijing’s economy:
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP (RMB billion) 50 140 162 一八 1 201 217 248 285 3 一三 361
GDP/Capita (RMB) 4,878 一
三,085
一
五,044
16,735 一
八,478
19,846 22,460 25,323 28,449 31,6 一
三
Per capita annual income
(RMB)
2,067 6,749 7,946 8,742 10,098 10,655 12,560 一
三,769
一
三,253
[]
Per capita disposal annual
income (RMB)
1,787 8,868 6,886 7,8 一
三
8,472 9,一八
3
10,350 11,578 12,464 一
三,883
Per capita savings (RMB) 2,209 11,758 一
五,839
一
八,197
20,955 24,374 26,395 35,510 38,631 36,346
(Source: [2003 年北京市国民经济和社会发展统计公报，北京市统计局])
High economic growth has contributed to the rapid development of Beijing’s real
estate market. In 2003, Beijing’s GDP reached RMB361 billion, and GDP per capita
reached RMB31,6 一三. Beijing outpaced the national GDP for five consecutive years.
According to Beijing’s Tenth Five Year Plan, the following targets are set to be
achieved in Beijing between 2001 and 2005:
increase GDP to RMB370 billion by 2005 (growth of 9% per annum from 2001 to
2005);
increase local fiscal income by 10% per annum;
create over 1 million new jobs between 2001 and 2005; and
lower the unemployment rate [in urban area] to less than 2%.
Key Drivers for Beijing Real Estate Market
Pursuant to Beijing’s Tenth Five Year Plan, various government policies have been
issued to improve town planning and urban living conditions in Beijing. These policies aim
at strengthening Beijing’s image as an efficient and modernized metropolis, reducing
overcrowding, improving traffic congestion and increasing green areas in the city. Total
investment in the real property sector reached RMB[16,590] million for the first quarter of
2004, accounting for % of Beijing’s total investment in fixed assets during the same
period and representing an increase of % from the first quarter of 2003.
Annual disposable income per person averaged RMB 一三,883 in Beijing in 2003,
which was approximately [] times that of 1990. Accordingly, more money was spent on
residential property in Beijing. According to the [Beijing Statistics Bureau], annual
spending per person on residential properties averaged [RMB ] in 2003, which was
approximately 4 times that of 1995.
In addition, the 2008 Olympics will be held by China in Beijing. The Beijing
government has announced plans to invest RMB 一 八 0 billion preparing for the 2008
Olympics, of which approximately billion will be used on sports venues and related
facilities, RMB 一五 billion on basic utilities such as water, power and gas supplies, RMB30
billion on basic information technology and telecommunication infrastructure and
billion on urban infrastructure construction. The Beijing government also announced plans
to improve the transportation system. By 2008, the Beijing government plans to extend the
metro lines to more than 100 km in length and add an additional 700 km of roads.
According to [the Beijing Municipal Bureau of Tourism], it is expected that the 2008
Olympics will attract over half a million visitors to Beijing and are expected to create
business opportunities for local accommodation.
Growth of Beijing Real Estate Market
According to the Beijing Statistics Bureau, a total GFA of approximately [24,一三
0,000] . was sold in 2003 in Beijing, which represents an increase of []% from that
of 2002. Approximately million . were sold in the first quarter of 2004, which
represents an increase of % from the same period in 2003. The table below sets out
figures showing the total GFA completed and total GFA sold in Beijing during 1999 and 2003,
reflecting supply and demand in the Beijing property market:
1999 2000 2001 2002 2003
GFA completed (m2 million) 一三.6
GFA sold (m2 million) 24.一三
(Source: Beijing Statistics Bureau)
Revenue of approximately billion was generated from the sale of real
properties in Beijing in 2003, which represents an increase of % from 2002.
Approximately RMB billion was generated from the sale of residential properties,
which represents an increase of % from 2002. The average selling price per .
fluctuated between RMB 4,279 and RMB 5,648 between 1999 and 2003. The table below sets
out the figures showing the total sale volume and average selling price per . of real
properties in Beijing from 1999 to 2003:
1999 2000 2001 2002 2003
Sales volume (RMB billion)
Average sales price per m2 (RMB) 5,648 4,919 5,061 4,279 4,456
(Source: Beijing Statistics Bureau)
REAL ESTATE MARKET OF NANJING
Nanjing is the capital city of Jiangsu Province in the Yangtze River Delta. It has an
area of over 6,598 . and a population of approximately million as at the end of
2003. The table below sets out selected indicators of Nanjing’s economy:
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP (RMB billion) 一八 58 67 76 83 90 102 1 一五 一三 0 一五 8
GDP/Capita (RMB) 3,472 10,887 12,580 14,057 一
五,264
16,522 一
八,546
20,597 22,858 26,200
Per capita disposable annual
income (RMB)
1,591 4,996 5,603 6,467 7,0 一
八
7,694 8,233 8,848 9,一五
7
10,194
Per capita savings (RMB) [] 5,140 7,000 8,334 一
五,421
[] [] 一
八,000
[] 10,196
(Source: [中国经济景气月报, 新华日报 and 新华日报])
Continuous economic growth and urbanization contributed to the rapid growth of
the real estate market in Nanjing. Large-scale reconstruction of the old city area and
subsequent relocation also helped to boost housing demand. According to the National
Statistics Bureau, a total GFA of over 4 million . was sold in 2003 in Nanjing.
According to the National Statistics Bureau, approximately 1,346,500 . were
sold in the first quarter of 2004, which represents an increase of 1 一三 .5% from the same
period in 2003. The table below sets out the figures showing total GFA completed and total
GFA sold in Nanjing from 1999 to 2003, reflecting supply and demand in the Nanjing
property market:
1999 2000 2001 2002 2003
GFA completed (million .)
GFA sold (million ) 1. 9
(Source: China Real Estate Statistics Yearbook 2002-2003)
Total investment in the real property sector reached billion for the first
quarter of 2004, accounting for 26% of Nanjing’s total investment in fixed assets during the
same period and representing an increase of % from the first quarter of 2003.
Revenue of approximately RMB billion was generated from the sale of real
properties in Nanjing in 2003, which represents an increase of % from 2002.
Approximately RMB billion was generated from the sale of residential properties, which
represents an increase of % from 2002. The average selling price per . also
increased from RMB3,072 in 1999 to RMB3,676 in 2003. The table below sets out the
figures showing the total sales volume and average selling price per . of real properties in
Nanjing from 1999 to 2003:
1999 2000 2001 2002 2003
Sales volume (RMB billion)
Average price per (RMB) 3,072 3,一五 0 3,200 3,212 3,676
(Source: China Real Estate Statistics Yearbook 2002-2003)
REAL ESTATE MARKET OF FUZHOU
Fuzhou is the capital city of Fujian Province in the southeastern cost of China.
Given its geographical location, Fujian province has strong economic and social ties with
Taiwan. Fujian has an area of over 12,一五 4 . and a population of approximately
million as at the end of 2003. The table below sets out selected indicators of Fuzhou’s
economy:
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP (RMB billion) 10 50 63 75 86 93 100 107 116 一三 0
GDP/Capita (RMB) [] [] 11,011 一
三,019
14,828 16,119 16,990 一
八,034
19,387 []
Per capita disposable annual
income (RMB)
[] [] 5,545 6,417 6,857 7,098 7,944 8,675 9,380 10,一
八 3
Per capita savings (RMB) 1,043 3,699 [] 5,301 5,594 6,676 7,586 8,834 10,311 []
(Source: [福州晚报 and 福建统计年鉴 2002 & 2003])
According to [Fujian’s] [Tenth] Five Year Plan, by 2010, Fujian’s urbanization rate
will increase to over 54%, with an increase of around 4 million urban residents. According
to [Fujian’s] [Tenth] Five Year Plan, the average per-person housing area for Fujian’s urban
residents will reach 35 . by 2020, compared to 25 . per person in 2003. Total
investment in the real property sector reached billion for the first quarter of 2004,
accounting for % of Fuzhou’s total investment in fixed assets during the same period and
representing an increase of % from the first quarter of 2003.
As living standards continue to improve, demand for better housing conditions has
encouraged the growth of the real estate market in Fuzhou. According to China Real Estate
Statistics Yearbook 2002-2003, a total GFA of approximately million . was sold in
2003 in Fuzhou. Approximately 662,800 . were sold in the first quarter of 2004, which
represents an increase of % from the same period in 2003. The table below sets out the
figures showing total GFA completed and total GFA sold in Fuzhou from 1999 to 2003,
reflecting supply and demand in the Fuzhou property market:
1999 2000 2001 2002 2003
GFA completed (m2 million)
GFA sold (m2 million)
(Source: China Real Estate Statistics Yearbook 2002-2003)
Revenue of approximately RMB 一三.7 billion was generated from the sale of real
properties in Fuzhou in 2003, which represents an increase of % from 2002.
Approximately billion was generated from the sale of residential properties, which
represents an increase of % from 2002. The average selling price per . also
increased from RMB2,521 in 1999 to RMB3,075 in 2003. The table below sets out the
figures showing the total sales volume and average selling price per . of real properties in
Fuzhou from 1999 to 2003:
1999 2000 2001 2002 2003
Sale Volume (RMB billion) 一三.7
Average price per m2 (RMB) 1990 2094 2121 3,062 3,075
(Source: [China Real Estate Statistics Yearbook 2002-2003])
REAL ESTATE MARKET OF HARBIN
Harbin is the capital city of Heilongjiang Province in northeastern China. It had an
area of over 4,272 . and a population of approximately 9,5 million at the end of 2003.
The table below sets out selected indicators of Harbin’s economy:
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP (RMB billion) 一八 53 68 75 82 88 100 112 123 141
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
GDP/Capita (RMB) 2,059 5,716 6,768 7,846 8,505 9,142 10,563 11,842 12,993 []
Per capita disposable annual
income (RMB)
1,387 3,706 4,099 4,233 4,450 5,033 5,632 6,407 7,004 7,893
Per capita savings (RMB) 1,043 3,699 [] 5,301 5,594 6,676 7,586 8,834 10,311
(Source: [哈尔滨统计信息网])
In 2003, the central government announced the revitalization plan for northeastern
China with the aim of developing this area into China’s fourth pillar of economic
development after the Pearl River Delta, the Yangtze River Delta and Beijing-Tianjin Area.
According to the plan, the central government is expected to invest RMB61 billion in 100
projects in northeast China by 2009 in order to stimulate the local economy, improve the
investment environment and increase foreign investment. As an important city in the
northeastern region and with its proximity to neighboring Russia, Harbin will be able to
benefit from the revitalization plan.
According to the [Harbin Statistics Bureau], a total GFA of approximately 3,900,000
. was sold in 2003 in Harbin which represents an increase of % from that of 2002.
Approximately millio . were sold in the first quarter of 2004, which represents an
increase of % from the same period in 2003. The table below sets out the figures
showing the total GFA completed and total GFA sold in Harbin from 1999 to 2003, reflecting
supply and demand in the Harbin property market:
1999 2000 2001 2002 2003
GFA sold (m2 million)
GFA completed (m2 million) 4.一八
(Source: )
Total investment in the real property sector reached RMB billion for the first
quarter of 2004, accounting for % of Harbin’s total investment in fixed assets during the
same period and representing an increase of % from the first quarter of 2003.
Revenue of approximately RMB 9.一八 billion was generated from the sale of real
properties in Harbin in 2003, which represents an increase of % from 2002.
Approximately RMB billion was generated from the sale of residential properties, which
represents an increase of % from 2002. The average selling price per . also
increased from RMB1,256 in 1999 to RMB2,324 in 2003. The table below sets out the
figures showing the average selling price per . of real properties in Harbin from 1999 to
2003:
1999 2000 2001 2002 2003
Sales volume (RMB billion)
Average price per m2 (RMB) 1,256 2,一五 9 2,259 2,257 2,324
(Source: )
2022 年 6 月 15 日星期三 00:56:19
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19 秒 Jun. 15, 2215 June 202212:56:19 AM00:56:19
