– July 2019

MARKET IN MINUTES Residential Savills Research

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RESEARCH

First-hand housing transaction volume drops James Macdonald The average price of new commodity housing increased steadily to RMB17,508 Senior Director China per sq m. +8621 6391 6688 james.macdonald@ savills.com.cn • New supply in Chengdu’s urban areas1 increased by 51.3% • The price of land designated for residential use in urban areas quarter-on-quarter (QoQ) and 49.6% year-on-year (YoY) to averaged RMB12,310.7 per sq m, increasing 24.0% QoQ and CENTRAL MANAGEMENT 1,137,000 sq m. 22.4% YoY in Q2/2019. Eric Wo • Transaction volume of urban first-hand commodity housing Managing Director totalled 780,000 sq m, a decrease of 35.4% QoQ and 32.8% Western China YoY. +8628 8658 7828 “The first-hand commodity [email protected]

• The average price of urban first-hand commodity housing residential supply increased Savills plc Savills is a leading global real increased by 11.7% QoQ and 28.9% YoY, to RMB17,508 per sq estate service provider listed on m. as the transaction volume of the London Stock Exchange. The company established in 1855, has a rich heritage with unrivalled residential land climbed growth. It is a company that leads 2 • The average price of suburban first-hand commodity housing rather than follows, and now has during Q2/2019. The housing over 600 offices and associates increased by 3.6% QoQ and 6.7% YoY to RMB11,573 per sq m. throughout the Americas, Europe, Asia Pacific, Africa and the Middle fund extraction amendment East. This report is for general • The transaction volume of land designated for residential use informative purposes only. It may not be published, reproduced or in urban areas reached 410,000 sq m, increasing 4.0% QoQ implemented by the quoted in part or in whole, nor may and 131.2% YoY in Q2/2019. it be used as a basis for any government continued to contract, prospectus, agreement or other document without prior consent. Whilst every effort has • The transaction volume of land designated for residential use regulate rigid purchasing been made to ensure its accuracy, Savills accepts no liability in suburban areas reached 975,000 sq m, increasing 109.9% whatsoever for any direct or demand and facilitated a consequential loss arising from its QoQ but dropping by 9.1% YoY in Q2/2019. use. The content is strictly healthy market development.” copyright and reproduction of the 1 Urban areas: Qingyang, Jinjiang, Jinniu, Wuhou, Chenghua and Hi-tech . whole or part of it in any form is prohibited without written 2 Suburban areas: Longquanyi, Shuangliu, Wenjiang, Xindu, Qingbaijiang, JAMES MACDONALD, SAVILLS RESEARCH and . permission from Savills Research. savills.com.cn/research 1 Residential

MARKET OVERVIEW 24.0% QoQ. The highest residential GRAPH 1: Urban Area Residential Supply Transaction And Average Price, Q3/2014 to The supply of first-hand commodity land sales price in urban areas reached Q2/2019 housing in urban areas totalled 1,137,000 RMB18,512 per sq m for a plot of land in Supply (LHS) Transaction (LHS) Price (RHS) sq m, a significant increase of 51.3% Longzui Village of Supo Street, Qingyang 4.0 16 QoQ in Q2/2019. Continued government District, which was purchased by controls caused first-hand residential Jinyan Real Estate Co. Ltd. Other 3.5 14 transaction volume to decline by 35.4% to representative transactions included thousands RMB per sq m sq per RMB thousands 3.0 12 780,000 sq m. Among all districts in urban two plots of land in Huaxin Village

2.5 10 areas, Hi-tech District lodged the most of Sanshengxiang, , transactions with a volume of 280,200 sq purchased by Xiamen Yize Trade Co. 2.0 8 m. Average price of first-hand commodity Ltd, with a land price of RMB18,400 per million sq m 1.5 6 housing reached RMB17,508 per sq m, an sq m, and three plots of land situated increase of 11.7% QoQ. Due to the spill- on Jitouqiao Street, , 1.0 4 over of housing supply, population and purchased by Poly (Chengdu) Co. Ltd 0.5 2 industry from urban areas, as well as the at RMB17,190 per sq m. The transaction ongoing infrastructure improvements volume of residential land in suburban 0.0 0 areas, situated primarily in Longquanyi

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 in suburban areas, commodity housing 2014 2015 2016 2017 2018 2019 transactions in Q2/2019 were most active district, reached 975,000 sq m. The

Source Savills Research in traditional suburban areas, with average AV increased 35.7% QoQ to abundant supply that reached 3,150,000 sq RMB7,559.0 per sq m, with a considerable m. The transaction volume of first-hand increase in the average premium rate. commodity housing in suburban areas totalled 2,740,000 sq m. The average price MARKET OUTLOOK GRAPH 2: Transaction Volumes In Urban Areas, Q3/2014 to Q2/2019 reached RMB11,573 sq m, an increase of In the second half of 2019, the incremental supply of residential land may cause Qingyang Jinjiang Jinniu Wuhou Chenghua Hi-tech zone 6.7% QoQ. 300 In Q2/2019, the average price of high- first-hand housing supply to gradually end housing remained stable, and there rise again, which is expected to ease the supply-demand tension in Chengdu’s 250 were no significant fluctuations in the market. As more consulates, such as the residential market. Housing prices will Consulate General of Spain, and Fortune keep climbing steadily. However, the 200 500 companies, like Amazon Web Service amendment to the individual housing and Gilead Sciences, settle in Chengdu in loan regulation combined with the 150 the near future, high-end residential prices housing common reserve fund extraction

million sq m million sq should rise in-step. management policy will be a further check 100 on robust housing demand. By raising LAND MARKET the threshold for housing investment, 50 In Q2/2019, transaction volume for the policies will support the sustainable residential land in urban areas reached development of the city’s real estate 0 410,000 sq m, increasing 4.0% QoQ. The market. Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 accommodation value (AV) averaged 2014 2015 2016 2017 2018 2019 RMB12,310.7 per sq m, an increase of Source Savills Research

GRAPH 3:High-end Residential Price Index, Q3/2014 TABLE 1:Chengdu Future Residential Projects, 2H/2019 to Q2/2019 Price Index 120 PROJECT NAME COMPLETION DISTRICT DEVELOPER

100

Chengdu Yuanda Tianfu New 80 Yuanda Central Garden 2019.7 Shuyang Real Estate District Co., Ltd 100 = 60 Chengdu Zhongding

Q1/2013 Zhongnan Haitang City 2019.7 Jinniu Lvzhou Real Estate 40 Co., Ltd

20 Poly Shizi Lake Zizhu 2019.7 Xindu Poly Real Estate 0 City Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 2014 2015 2016 2017 2018 2019

Source Savills Research Source Savills Research

savills.com.cn/research 2