– April 2020

MARKET IN MINUTES Residential Savills Research

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James Macdonald Senior Director China +8621 6391 6688 james.macdonald@ Urban housing supply fell sharply QoQ savills.com.cn The average price of commodity housing increased to RMB21,300 per sq m. Sophy Pan Senior Manager • The first-hand commodity housing in Chengdu urban areas1 • The average price of residential land in suburban areas Western China was about 1,024,000 sq m, decreasing 53.9% quarter-on- reached RMB 8,700 per sq m, increasing 36.5% QoQ and +8628 6737 3737 quarter (QoQ) but increasing 36.2% year-on-year (YoY) in 56.7% YoY. sophy.pan@ savills.com.cn Q1/2020. CENTRAL MANAGEMENT • The transaction volume of urban first-hand commodity housing totalled 1,086,000 sq m, decreasing 4.7% QoQ and “Once the outbreak is contained, Eric Wo 10.1% YoY in Q1/2020. Managing Director the real estate market is Western China • The average price of urban first-hand commodity housing expected to return to normal +8628 8658 7828 was RMB21,300 per sq m, increasing 5.2% QoQ and 36.1% [email protected]

YoY. with the work resumption and Savills plc Savills is a leading global real recovered offline house sales. A estate service provider listed on • The average price of suburban2 first-hand commodity the London Stock Exchange. The system of mutual identification company established in 1855, has housing was RMB 12,500 per sq m, increasing 0.5% QoQ and a rich heritage with unrivalled growth. It is a company that leads 12.2% YoY. and loans between and rather than follows, and now has over 600 offices and associates Chongqing established the throughout the Americas, Europe, • The transaction volume of residential land in urban areas Asia Pacific, Africa and the Middle East. This report is for general reached 192,000 sq m, decreasing 80.4% QoQ and 51.4% YoY. foundation of the joint Housing informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may Provident Fund. Real estate it be used as a basis for any • The transaction volume of residential land in suburban areas contract, prospectus, agreement reached 896,000 sq m, decreasing 47.2% QoQ but increasing developers’ investments will or other document without prior consent. Whilst every effort has 93.0% YoY. been made to ensure its accuracy, rise, and the first-hand housing Savills accepts no liability whatsoever for any direct or supply in Chengdu is predicted consequential loss arising from its • The average price of residential land in urban areas reached use. The content is strictly RMB 9,560 per sq m, decreasing 8.3% QoQ and 3.7% YoY. copyright and reproduction of the to be steady.” whole or part of it in any form is prohibited without written SOPHY PAN, SAVILLS RESEARCH permission from Savills Research. 1Urban areas: , Jinjiang, Jinniu, Wuhou, Chenghua and Hi-tech . 2 Urban areas: Qingyang, Jinjiang, Jinniu, Wuhou, Chenghua and Hi-tech District. savills.com.cn/research 1 Residential

MARKET OVERVIEW Real Estate Development Limited Company. GRAPH 1: Urban Area Residential Supply Transaction And Average Price, Q2/2015 to In Q1/2020, the first-hand residence supply At the same time, the lowest-priced piece of Q1/2020 in Chengdu urban areas decreased sharply, to residential land came was on the east side Supply (LHS) Transaction (LHS) Price (RHS) only 192,000 sq m. The transaction volume of the attached primary school of UESTC in 4.0 24 of first-hand commodity housing in urban Hi-tech District and was sold at RMB 4,009 3.5 21 areas reached 1,086,000 sq m, and the volume per sq m; the land was obtained by Chengdu thousands RMB per sq m 3.0 18 in suburban areas was 2,330,000 sq m. The Hi-tech Electronic Information Industry average price of first-hand residences in Development Limited Company. 2.5 15 urban areas increased slightly to RMB21,300 In the suburban areas, the transaction 2.0 12 per sq m QoQ in Q1/2020. The transaction volume of residential land reached 896,000

million sq m million 1.5 9 of residential land in urban areas decreased sq m, decreasing 47.2% QoQ and decreasing

1.0 6 sharply 80.4% QoQ to 192,000 sq m. The 93.0% YoY; The average floor price of average floor price of residential land in urban residential land reached RMB8,700 per sq m, 0.5 3 areas decreased 0.8% QoQ to RMB9,560 per increasing 36.5% QoQ and increasing 56.7% 0.0 0 sq m. The average floor price of residential YoY. Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 land in suburban areas increased 36.5% to 2015 2016 2017 2018 2019 2020 RMB 8,700 per sq m. MARKET OUTLOOK Source Savills Research For residents in Chengdu, the rules In March 2020, Sichuan and Chongqing for drawing from the Chengdu Housing established a system of mutual identification Provident Fund were relaxed. For example, and loan applications for the housing the operation certificate was no longer provident funds. With this new system, GRAPH 2: Transaction Volumes In Urban Areas, Q2/2015 to Q1/2020 demanded in 11 situations, the number of certain employees can apply for the housing documents necessary was reduced from 62 to provident funds loan in either Chengdu or Qingyang Jinjiang Jinniu Wuhou Chenghua Hi-tech district Chongqing with greater ease and flexibility. 3.0 39 and the verification process was simplified and streamlined. The goal of this joint policy is to enhance

2.5 talent circulation between the two regions LAND MARKET and integrate Sichuan (with Chengdu as 2.0 In Q1/2020, the transaction volume of the primary destination) and Chongqing’s residential land in urban areas totalled housing provident funds. In the future, 1.5 192,000 sq m, decreasing 80.4% QoQ and transferring an employee’s housing provident decreasing 51.4% YoY. The average floor price funds between Sichuan and Chongqing will million million sq m 1.0 reached RMB9,560 per sq m, decreasing become easier, and the program should help slightly 8.3% QoQ and decreasing 3.7% YoY. Chengdu’s residential market develop more 0.5 The residential land with the highest floor efficiently. price in urban areas was near Supo Street in 0.0 . The average floor price Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 2015 2016 2017 2018 2019 2020 reached RMB18,400 per sq m, and this land

Source Savills Research was obtained by Chengdu Zhongjitianyao

GRAPH 3:High-end Residential Price Index, Q2/2015 TABLE 1:Future Supply, H2/2020 to Q1/2020 Price Index 120 PROJECT NAME COMPLETION DISTRICT DEVELOPER 100 Xiangbao Investment Chengdu ICC H2/2020 (Chengdu) Limited 80 Tianjun Company 100 = 60 Chengdu Dingkang Xianglin Hanbi H2/2020 Capitaland Limited Tianxia Company Q1/2013 40 Sichuan Huadicaifu Wuhua Tianyuge H2/2020 Investment Group Limited 20 Company

Chengtou Chengdu Chengtou 0 Capitaland H2/2020 Chenghua District Haocheng Capitaland Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 Wutongxi Limited Company 2015 2016 2017 2018 2019 2020

Source Savills Research Source Savills Research

savills.com.cn/research 2