Tag Archives: real estate

Tale of two cities’ housing markets

The contrast between Hong Kong and Shenzhen could not be starker than in their respective plans for subsidized, or social, housing. While Shenzhen is targeting a surge over the coming two years, putting as many as 300,000 units on the market, Hong Kong has announced it will likely be able to build no more than 13,400 units in the current year, well down from its initial target of just 18,000 for the fiscal period ending in March.

Shenzhen plans to sell 600,000 new homes between now and 2022, of which rental units will be no less than 300,000, it was announced this week. This is part of the city’s bigger urban development plan, unveiled in August last year, which will see 1.7 million new houses built by 2035, with more than 1 million being subsidized.

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Shenzhen moves to dampen housing rebound

Shenzhen’s Housing and Construction Bureau has acted to dampen speculation in the city’s housing market, targeting WeChat users who had been allegedly trying to engage in “collective pricing” actions.

The bureau said that anyone who was found to have engaged in such speculation would see their secondary housing online signing procedures suspended.

Estates in the spotlight were named as Shenzhen Hengyubin City, Zhongliang Fenghuangli Garden, and a few others.

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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”.

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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.

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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.

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.

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Songshan Lake to get complex

Songshan Lake, the high-tech zone in Dongguan, is going upscale. Already the home of the Huawei R&D headquarters known as Ox Horn, which has a collection of European-style buildings and its own mini-railway, the district has been in need of a major commercial complex. It is getting one around the Songshan Lake North railway station, courtesy of China Resources Group, which makes its first foray into Dongguan with a large, mixed use project, Wan Xiang Hui. 

The project broke ground yesterday, Dongguan Daily reports. It is expected to be finished in three years, boasting offices, shops, hotels and apartments, covering an area of 44,100 sqm, with a total construction area of about 350,000 sqm. It consists of a podium with five floors above and one below ground, plus two towers at 240 meters and 130 meters high, respectively.

The station is a major future transport hub, with the Guangzhou-Huizhou Intercity Railway passing through, as well as Dongguan’s metro Lines 3 and 5, all of which are still under construction. 

Residents will likely especially appreciate the Wan Xiang Hui Square, which will feature a wide variety of modern dining and entertainment options. Songshan Lake is a beautiful area, but it does get a bit dull at night.

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