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Multi-indicator of Real Estate Market Continues to Grow and "Overall Warming" Becomes the Consensus

2014-06-23 10:27

BEIJING, June 23, 2014 /PRNewswire/ -- After the adjustment in the first half year, now the entire real estate market has become stable, in particular the situation of the real estate market in the past several weeks has indicated the warming again after a cold spell and the confidence of market participants is recovering. An original report by Sina Leju follows:

According to the latest data of CREIS, during the week from 9th June to 15th June, the cumulative transaction area of the domestic 40 cities rose by 13% MoM and 7% YoY, which indicated the warming of the cumulative turnover. Of which the first tier cities had the largest MoM growth rate reaching 39% and the MoM growth rate of Beijing reached 1.7 times; the second tier cities also had a certain YoY and MoM growth.

The commercial residential building sales data of seventy cities in May of the State Statistic Bureau indicates that, comparing to that in last May, there are 69 cities with increasing price, of which the highest amount reaches 11.3% (Shanghai).

As the leading real estate enterprise with the largest coverage in China, Evergrande Real Estate Group has the keenest and the most objective market tendency, whose sales condition will best indicate the trace of warming in the recent real estate market. On 21st and 22nd June, Evergrande started two consecutive openings, with the amount of subscription clients much more than the sales quantity, which shows its popularity. The opening of Hefei Evergrande Central Square obtained a sales volume of 2.56 billion yuan, including 1.34 billion yuan of residential building and 1.22 billion yuan of shops. And the opening of Evergrande Mingdu in Pingdingshan achieved the sales volume of 0.61 billion. The unit price of these two openings is equivalent to or even a little higher than the average price of the local neighboring market.

The sales volume of the two projects set a new opening property sales record with a total volume of nearly 3.2 billion, of which Hefei Evergrande Central Square created a new nationwide record of this year, and Pingdingshan Evergrande Mingdu created a new record of the third-tier cities this year.

It is noteworthy that, in the new wave of warming in the real estate, the performance of the top 20 real estate enterprises is significantly stronger than that of the overall market, and the concentration of the sales volume achieved stable improvement. Those 20 major Chinese developers that Moody's tracked accomplished the contract sales volume about 268.6 billion yuan in the first quarter, with a year-on-year growth of 12.3%.

The market adjustment worsened the competition which accelerated the market selection, and the differentiation trend of the real estate enterprise is obvious that the stronger remains its position. In the first five months of this year, only Vanke and Evergrande accomplished 40% of the annual target. Vanke's sales volume in the first five months reached 56.2 billion yuan with a year-on-year growth of 64.4%, becoming the unique large-sized real estate enterprise completing the half of the annual sales volume target in the first five months.

According to the recent positive performance of the real estate market, it is predicted that the real estate market will recover soon. GF Securities research report in May pointed out that "currently the anticipation of the relaxation and exit of demand suppression policy has been gradually fulfilled, and when the market thoroughly plays the role of regulating in the real estate industry, the industry will get new support." The study reported that under the push of the supply side and the healthy policy expectation, the performance of year-on-year market will be improved continually.

During an interview by the Reuters, the analyst Karen Kwan of Kim Eng Securities stated that besides enterprise with good sales volume as Evergrande, if other real estate enterprises can take more active measures in the third season, it will definitely help to improve the overall sales volume in Chinese real estate market and reduce inventory.

Analysts in this industry believed that whatever the adjustment of policy and market are, products satisfying the rigid demand with high performance cost ratio will get the recognition of the market and win in the competition. The real estate enterprise creating products with high performance cost ratio with good quality, high landscaping standard, perfect infrastructure, and exquisite decoration will attract buyers.

Source: Sina Leju

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