Category Archives: Real Estate

Jiangmen beckons with easier housing rules

At least 30 cities across the country have recently loosened their restrictions on non-official residents buying into the local property market. Jiangmen is among them, according to local media.

As Bloomberg reports, the slowest economic growth in 30 years is prompting some city governments to loosen up and allow people living in their jurisdictions without a local residency permit (a hukou) to buy a home.

Jiangmen, the city on the far western side of the Greater Bay, next door to Zhuhai and Zhongshan, has gone a couple of steps further. According to the city’s Housing and Construction Bureau, it wants to support “all kinds of innovative entrepreneurs to live and work in Jiangmen, attract business and investment, and integrate into the Greater Bay Area”.

Continue reading Jiangmen beckons with easier housing rules

Office vacancy rates rise in all GBA cities

Savills has released a report on the Greater Bay Area’s office market that shows supply is increasing at a fast pace, pushing up vacancy rates.

While Hong Kong, Shenzhen and Guangzhou remain in strong demand compared to the rest, even they are seeing rates that should be enough to keep landlords awake at night.

Continue reading Office vacancy rates rise in all GBA cities

Shenzhen puts a lid on housing

We were going to write a long analysis of this announcement by Shenzhen yesterday but then SCMP did it for us: Shenzhen has announced a shift in its housing policy that will effectively put a government-set ceiling on housing prices. 

In a nutshell, Shenzhen is going to release land for developers to build subsidized housing at prices set according to a benchmark decided by the city government. This year, the cap is RMB 50,000 per sqm for land inside the city center and RMB 40,000 for land outside what used to be the boundary of the Special Economic Zone. The supply will be enough to ensure that it acts as a brake on the rest of the privately developed market

While Hong Kong claws back idle land from developers and plans to build 10,000 homes in the next three years at subsidized prices for the less well-off, Shenzhen is using its control of existing land supply to build 80,000 new subsidized homes this year alone, and 1.7 million, or 60,000 a year, until 2035.

The SCMP says Shenzhen is turning its back on the Hong Kong model of housing development with this move. Actually, it has been under way for years. And Hong Kong is not that different in theory, either. It has subsidized housing for sale and rental, too.

In practice, the difference is that one city is run in ways that put “market forces” first, and the other is not. Which will turn out more peaceful and prosperous over the longer term will surely be studied closely by historians and economists in the year 2035, if not before.

Read more from SCMP.

Shenzhen opens new ‘rent control’ housing

Shenzhen’s Housing and Construction Bureau opened applications online this week for 248 sets of renovated apartments in Tanglang City Plaza. These are not just any kind of apartments, however: their rents are set at a monthly baseline averaging RMB110 per sqm (slightly adjustable for bigger units and higher floors), which is significantly below the market average of RMB139.6 per sqm in the surrounding Nanshan district, home to many of the city’s tech companies.

Moreover, here’s the kicker: rents in these units will be controlled. Annual fluctuations will not exceed 5%, up or down. Successful applicants can take leases of 1-3 years, which can be renewed, but for a maximum total of five years.

Continue reading Shenzhen opens new ‘rent control’ housing

Guangzhou commercial market stabilizes

Guangzhou’s commercial property market picked up in Q3 as supply eased and transactions rose, latest data quoted by local media show. Apartments and shops were strong, while offices were still hampered by oversupply.

Apartment transactions rose 40% YoY, while those for shops were up a whopping 70%. Office transactions, however, fell 20% YoY, although Q3 was a sequential improvement over Q2 (+20%).

Broken down by month, September showed an acceleration, especially in offices. Fewer office buildings have been coming onto the market in recent months, while apartments and shops continue to surge. In September, only 49,000 sqm of new office space was released.

Read more.

GBA’s land sales surge in September

September saw signs of a strong recovery in the Greater Bay Area’s real estate market, as developers bought 39 new land parcels worth RMB 38.7 billion, nearly a 50% jump over August.

Leading the way was the “Guangfo” megalopolis of Guangzhou and Foshan, with 16 plots sold in total by the two adjoining municipalities, which between them have a population of more than 20 million. Shenzhen and Zhongshan, where available land supply is scarce, both sold only one plot. Zhuhai has more available land, but sold only one plot as well. Dongguan saw probably the hottest competition, as one popular plot generated 91 rounds of bids.

The plots will yield a saleable area of over 2.13 million sqm, up from 1.37 million sqm in August, and were worth RMB 38.7 billion, up 46.6% from RMB 26.45 billion.

Among the leading developers, Vanke, Jinmao, Jindi, Poly, Agile, Oct, Hejing Futai, and China Resources were active as usual, but they were often teamed up rather than going alone. Most prominent were Vanke & Zhongtian, Jialin Group & Zhongnan Property Holdings, Hongyu Group & Junming Group.

Here is a breakdown, courtesy of local real-estate promoter leju.com, for the nine GBA cities inside Guangdong. Continue reading GBA’s land sales surge in September

Shenzhen to build 1.7 million flats

Shenzhen’s government has released a formal notice of its intention to reform the city’s housing market, which will see 1.7 million new homes built over the remainder of the GBA masterplan ending in 2035.

According to local media, Shenzhen will bring this supply onto the market in a phased, manner, balancing the need for government guidance and market participation. At its core, it seems there is only one red line: the supply of land will ensure a strict 40:60 ratio is maintained between public and commercial housing. Public housing will include apartments set aside for “talent”, as well as subsidized ownership and rentals.

In short, Shenzhen is going to be more like Singapore and nothing like Hong Kong.

The “Interim Provisions”, which have been released for public comment – no, really, they have – clarify that the government will “comprehensively guide” the supply of various types of housing land, yet will mainly undertake the task of renting public housing land. In order to “mobilize the enthusiasm of market participants” and adhere to the basic principle of “benefit sharing,” market entities (developers) will be responsible for building public housing for sale, yet “adopting agreements and transfer in accordance with national policies”. This is to encourage market participants to “actively participate,” understand.

Watch this space.

Developers rush to cash in on Shenzhen’s new status

It is known as the “818” policy, after the day on which Shenzhen was given its status as a Pioneering Zone for Socialism with Chinese Characteristics. Since August 18, the city’s property developers have been celebrating by releasing a flood of new homes onto the market, raising expectations of a surge in housing-based prosperity.

So far, it hasn’t happened. New data from Shenzhen shows that the supply of new homes in September expanded by nearly 150% month-on-month, as developers brought 533,500 sqm of space onto the market. Yet transactions dropped, totaling 2,748, down 9.55% over August.

Continue reading Developers rush to cash in on Shenzhen’s new status

Shenzhen property stays cool

Shenzhen’e real estate market continued to stabilize in August, with the sales price of new homes rising 0.2% while the secondary market saw a slight dip, down 0.2%. 

Quarter-on-quarter, prices in the secondary market rose 2.3% QoQ, and they remain the highest in Guangdong at RMB 68,433 per sqm.

Analysts said it was clear that cooling measures put in place earlier this year were continuing to be felt. Huang, Lichong of Synergy Solution Management, said he expected prices will be stable or even slightly down in the near term.

Yuejin Yan, the CRO of E-house Research Institute, said that downward pressures remained strong, as Shenzhen needs to control the widening wealth gap and build more social housing.

Qianhai’s office rent seen catching up fast

Qianhai has a lot of yet-to-be leased office space on the market, with vacancy rates at historic highs for a district in Shenzhen. Never mind, says international real estate consultancy Colliers, it will catch up fast and likely overtake the neighboring Houhai district.  

Thanks to policy support for the special economic zone, which is attracting a surge of investment, Colliers believes Qianhai will benefit from near-term and longer-term trends in the coming years. (Read our primer on Qianhai to understand more.) Subsidies are currently generous, making rents here less than 70% of what they are in other districts, while infrastructure is being put in place that will soon make the district easier to access from the rest of the city.   Continue reading Qianhai’s office rent seen catching up fast