November 2016 Housing Price Data in Markets of Selected Chinese Property Developers

China Index Academy (a research unit of Soufun) released its monthly report of new home prices in 100 top Chinese markets (LINK).  On a national basis average selling prices rose 0.9% for the month and 18.7% from one year ago.

china-sfun-100-city-price-index-november-2016

Approximately 23 Chinese cities have introduced measures to stabilize markets and slow price appreciation, primarily by limiting demand through tighter mortgages and residency requirements.  Anecdotal evidence also suggests some heavy-handed intervention to force the price indices to conform to the new cooling policy trend by delaying approval for pre-sales of high-priced homes and delaying the official recording of contracts between buyers and developers.  Officials also made high-profile crackdowns on purported marketing violations by developers.  Restrictive policies are unlikely to ease until average monthly price changes show declines in many of these markets:

hpr-cities-nov-2016

 

While the average one year home price gain is China is quite high, considerable differences exist between different regions and cities (see China Property: Hot or Not? for more detail).  Exposure to the good markets varies significantly among real estate developers.

The Selected Companies:  (See Benchmarking Xinyuan Real Estate after its rally for additional comments)

xin-comps-121216

Xinyuan Real Estate: primarily a regional developer based in Central China (Zhengzhou, Jinan, Xi’an).  The company has also had a steady presence in the Yangtze River Delta (Suzhou and Kunshan) for 10 years and more limited history in other cities.

xin-markets-121216

Future Land Development: primarily a regional developer with a focus on the Yangtze River Delta (especially Suzhou, Nanjing, Shanghai, Changzhou and Hangzhou).

future-markets-121216

CIFI Holdings: primarily been a regional developer with a focus on the Yangtze River Delta (especially Shanghai, Suzhou, Hangzhou, Nanjing, and Hefei).  These markets have been extremely strong in 2016 and have good long-term economic potential.

cifi-markets-121216

China SCE Property was a regional developer with a focus on Fujian Province (especially the city of Quanzhou), but in recent years wisely shifted new investment towards major cities (Shanghai, Beijing,Hangzhou, Shenzhen and Tianjin).

sce-markets-121216

Yuzhou Properties was a regional developer with a focus on Fujian Province (especially the city of Xiamen), but in recent years wisely identified strong markets in the Yangtze River Delta (Hefei Nanjing and Shanghai).

yuzhou-markets-121216

Central China Real Estate is a regional developer with an exclusive focus on Henan Province.

ccre-markets-121216

Fantasia Holdings was a regional developer with a focus on the Pearl River Delta (Shenzhen, Dongguan, Huizhou)

fantasia-markets-121216

KWG Property was a regional developer with a focus on the Pearl River Delta with a limited expansion to other top cities.

kwg-markets-121216

 

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