Page 312 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
2.9 Real Estate
Background development in 2016 reached 10.258 trillion yuan, a 6.9
percent year-on-year increase. The volume of property
China’s property market has become sold in 2016 reached 1.57 billion square meters, a 22.5
increasingly diversified, with percent year-on-year growth, realizing total revenue
major cities reporting record prices and smaller cities of 11.76 billion yuan, for a 34.8 percent year-on-year
struggling to reduce inventory. The split picture means increase. The trend of real estate development in the
the government must strike a balance between curbing country was positive overall, but there was a high
asset bubbles in big cities and boosting sales in smaller divergence between top-tier and lower-tier cities.
cities. The Chinese government has been trying to wean City-specific policies to curb speculation and prevent
the economy off sizzling property development to make it overheating in first- and-second-tier cities and reduce
more sustainable. The Central Economic Work Conference inventories in lower-tier cities have been working
at the end of 2016 set the tone for the real estate market effectively, Ning said (Wu).
in 2017: stable and healthy development. “Houses are
built to be lived in, not for speculation,” said a statement China’s investment in property development gained
issued after the conference. The country will establish a steam in 2016, as investors continued to start new
market-oriented long-term mechanism that can curb projects amid surging house prices. Investment in real
real estate bubbles and prevent erratic fluctuations. estate development grew 6.9 percent year-on-year in
The government will use land, investment, lawmaking, 2016, 1.1 percentage points faster than in the first three
fiscal policy and financial instruments to achieve its aim, quarters, and 5.9 percentage points faster than a year
according to the statement (Song, China’s). earlier, according to the NBS. Factoring in price changes,
property investment increased 7.5 percent year-on-year,
Real Estate the NBS said. For residential properties, investment rose
6.4 percent year-on-year, and the floor space of new
The real estate sector’s contribution to overall gross residential construction expanded 8.7 percent year-on-
domestic product growth is likely to drop significantly year. Housing sales maintained steady growth. In terms
in 2017, according to the Head of the National Bureau of of floor area, property sales jumped 22.5 percent, while
Statistics. The real estate sector contributed 6.5 percent in terms of value, sales rose 34.8 percent. By the end of
to overall GDP in China in 2016, or 7.8 percent to overall 2016, 695.4 million square meters of property remained
GDP growth in the country, according to Ning Jizhe, unsold in China, down 3.2 percent year-on-year.
Head of the National Bureau of Statistics (NBS) of China
and Deputy Director of the National Development and China’s property market has shown signs of cooling
Reform Commission. Ning said that in 2017 the financial as prices faltered or posted slower growth in major cities
authorities would rigorously implement the policy that amid tough government curbs, according to data from
housing is for housing, not for speculating, and enable the NBS. On a yearly basis, new home prices continued
the real estate market to develop in a healthy and stable to climb in the 70 cities surveyed in June 2017, but the
manner. “The construction sector and the real economy pace of growth slowed in 15 major cities compared with
part of the property market are pillars of the country’s the previous month. On a month-on-month basis, new
economic growth and they are important for meeting home prices fell or remained flat in nine cities (Song,
mass housing demand,” Ning said. “We can well handle Chinese Cities). China’s government has pursued a
the situation that some real estate market benchmarks hard line against real estate developers during 2016
are diverging in cities, and be secure that real estate by cutting buyer demand, controlling financing, and
is meeting people’s demand while playing its role in forcing companies out of the sector. With signs of
economic growth,” he added. Investment in real estate distressed companies emerging and sector-driven
312
2.9 Real Estate
Background development in 2016 reached 10.258 trillion yuan, a 6.9
percent year-on-year increase. The volume of property
China’s property market has become sold in 2016 reached 1.57 billion square meters, a 22.5
increasingly diversified, with percent year-on-year growth, realizing total revenue
major cities reporting record prices and smaller cities of 11.76 billion yuan, for a 34.8 percent year-on-year
struggling to reduce inventory. The split picture means increase. The trend of real estate development in the
the government must strike a balance between curbing country was positive overall, but there was a high
asset bubbles in big cities and boosting sales in smaller divergence between top-tier and lower-tier cities.
cities. The Chinese government has been trying to wean City-specific policies to curb speculation and prevent
the economy off sizzling property development to make it overheating in first- and-second-tier cities and reduce
more sustainable. The Central Economic Work Conference inventories in lower-tier cities have been working
at the end of 2016 set the tone for the real estate market effectively, Ning said (Wu).
in 2017: stable and healthy development. “Houses are
built to be lived in, not for speculation,” said a statement China’s investment in property development gained
issued after the conference. The country will establish a steam in 2016, as investors continued to start new
market-oriented long-term mechanism that can curb projects amid surging house prices. Investment in real
real estate bubbles and prevent erratic fluctuations. estate development grew 6.9 percent year-on-year in
The government will use land, investment, lawmaking, 2016, 1.1 percentage points faster than in the first three
fiscal policy and financial instruments to achieve its aim, quarters, and 5.9 percentage points faster than a year
according to the statement (Song, China’s). earlier, according to the NBS. Factoring in price changes,
property investment increased 7.5 percent year-on-year,
Real Estate the NBS said. For residential properties, investment rose
6.4 percent year-on-year, and the floor space of new
The real estate sector’s contribution to overall gross residential construction expanded 8.7 percent year-on-
domestic product growth is likely to drop significantly year. Housing sales maintained steady growth. In terms
in 2017, according to the Head of the National Bureau of of floor area, property sales jumped 22.5 percent, while
Statistics. The real estate sector contributed 6.5 percent in terms of value, sales rose 34.8 percent. By the end of
to overall GDP in China in 2016, or 7.8 percent to overall 2016, 695.4 million square meters of property remained
GDP growth in the country, according to Ning Jizhe, unsold in China, down 3.2 percent year-on-year.
Head of the National Bureau of Statistics (NBS) of China
and Deputy Director of the National Development and China’s property market has shown signs of cooling
Reform Commission. Ning said that in 2017 the financial as prices faltered or posted slower growth in major cities
authorities would rigorously implement the policy that amid tough government curbs, according to data from
housing is for housing, not for speculating, and enable the NBS. On a yearly basis, new home prices continued
the real estate market to develop in a healthy and stable to climb in the 70 cities surveyed in June 2017, but the
manner. “The construction sector and the real economy pace of growth slowed in 15 major cities compared with
part of the property market are pillars of the country’s the previous month. On a month-on-month basis, new
economic growth and they are important for meeting home prices fell or remained flat in nine cities (Song,
mass housing demand,” Ning said. “We can well handle Chinese Cities). China’s government has pursued a
the situation that some real estate market benchmarks hard line against real estate developers during 2016
are diverging in cities, and be secure that real estate by cutting buyer demand, controlling financing, and
is meeting people’s demand while playing its role in forcing companies out of the sector. With signs of
economic growth,” he added. Investment in real estate distressed companies emerging and sector-driven
312
