– October 2019

MARKET IN MINUTES Residential Savills Research

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RESEARCH

James Macdonald Senior Director +8621 6391 6688 james.macdonald@ Housing supply continues to decline savills.com.cn Sophy Pan The average price of new commodity housing increased slightly to RMB17,700 Senior Manager per sq m. Western China +8628 6737 3737 • New supply in Chengdu’s urban areas1 decreased by 44.6% • The price of land designated for residential use in urban sophy.pan@ savills.com.cn quarter-on-quarter (QoQ) but increased by 35.5% year-on-year areas averaged RMB11,700 per sq m, dropping 5.2% QoQ but (YoY) to 630,000 million sq m. increasing 32.0% YoY in Q3/2019. CENTRAL MANAGEMENT

• The transaction volume of urban first-hand commodity • The price of land designated for residential use in suburban Eric Wo housing totalled 797,000 sq m, an increase of 0.9% QoQ and areas reached RMB7,900 per sq m, increasing 4.5% QoQ and Managing Director 0.5% YoY. 44.4% YoY in Q3/2019. Western China +8628 8658 7828 • The average price of urban first-hand commodity housing [email protected]

increased by 1.5% QoQ and 27% YoY to RMB17,700 per sq m. Savills plc Savills is a leading global real “First-hand commodity estate service provider listed on • The average price of suburban2 first-hand commodity housing the London Stock Exchange. The company established in 1855, has increased by 3.5% QoQ and 10% YoY to RMB11,900 per sq m. residential supply increased as a rich heritage with unrivalled growth. It is a company that leads rather than follows, and now has the transaction volume of over 650 offices and associates • The transaction volume of land designated for residential use in throughout the Americas, Europe, urban areas reached 635,000 sq m, increasing 55.0% QoQ and urban first-hand commodity Asia Pacific, Africa and the Middle East. This report is for general 29.6% YoY in Q3/2019. informative purposes only. It may housing also grew. The process not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any • The transaction volume of land designated for residential use of extracting money from the contract, prospectus, agreement in suburban areas reached 702,000 sq m, dropping 27.9% QoQ or other document without prior government’s housing fund consent. Whilst every effort has and 57.7% YoY in Q3/2019. been made to ensure its accuracy, Savills accepts no liability has been simplified to help whatsoever for any direct or 1 Urban areas: Qingyang, Jinjiang, Jinniu, Wuhou, Chenghua and Hi-tech . consequential loss arising from its 2 Suburban areas: Longquanyi, Shuangliu, Wenjiang, Xindu, Qingbaijiang, use. The content is strictly and . develop a healthier market.” copyright and reproduction of the whole or part of it in any form is JAMES MACDONALD, SAVILLS RESEARCH prohibited without written permission from Savills Research. savills.com.cn/research 1 Residential

MARKET OVERVIEW accommodation value (AV) averaged GRAPH 1: Urban Area Residential Supply Transaction And Average Price, Q4/2014 to The supply of first-hand commodity RMB11,700 per sq m, a decrease of Q3/2019 housing in urban areas totalled 630,000 5.2% QoQ. The highest residential Supply (LHS) Transaction (LHS) sq m, a significant decrease of 44.6% land sales price in urban areas reached 4.0 21 QoQ in Q3/2019. The housing market was RMB19,800 per sq m for a plot of land in 3.5 18 relatively stable during the quarter, so the the Linjiapo area, , and thousands RMB per sq m 3.0 16 first-hand residential transaction volume it was purchased by Chengdu Jinjiang increased by 0.9% to 797,000 sq m. The District Unified Construction Co., 2.5 13 average price of first-hand commodity Ltd. and Guangzhou Huafa Real Estate 2.0 10 housing reached RMB17,700 per sq m with Development Co., Ltd. In suburban areas,

million sq m million 1.5 8 a slight increase of 1.5% QoQ. Compared the transaction volume of residential land

1.0 5 to the urban areas, the supply of first-hand was focused primarily in Tianfu New commodity housing in the traditional district and reached 702,000 sq m, a drop 0.5 3 suburban areas is relatively adequate to of 27.9% QoQ. The average AV in suburban 0.0 0 meet market demand. The new supply in areas increased 4.5% QoQ to RMB7,900 Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 Chengdu’s suburban areas decreased by per sq m, with the average premium rate 2014 2015 2016 2017 2018 2019 10.4% to 279,300 sq m. The transaction moving down 25%. Source Savills Research volume of first-hand commodity housing in suburban areas increased slightly by MARKET OUTLOOK 0.8% to 271,300 sq m. The average price On 1 September, the Chengdu housing reached RMB11,900 sq m, with an increase common reserve fund extraction GRAPH 2: Transaction Volumes In Urban Areas, Q4/2014 to Q3/2019 of 3.5% QoQ. management policy was formally In Q3/2019, the average price of implemented and will simplify the process Qingyang Jinjiang Jinniu Wuhou Chenghua Hi-tech district of extracting housing funds to facilitate 3,000 high-end housing remained stable, and there were no significant fluctuations the development of a healthy housing

2,500 in the market. As several Fortune 500 market. In the future, first-hand housing companies, like Amazon Web Service and supply may gradually rise due to the 2,000 Gilead Sciences, increase their presence in incremental release of residential land, Chengdu, and more community facilities and the increase should ease the supply- 1,500 undergo upgrades and renovations, the demand tension in Chengdu’s residential price of high-end residential properties is housing market.

thousand m sq 1,000 likely to rise in-step.

500 LAND MARKET In Q3/2019, the transaction volume 0 for residential land in urban areas 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 continued to increase to 635,000 sq m, a

Source Savills Research significant increase of 55.0% QoQ. The

GRAPH 3:High-end Residential Price Index, Q4/2014 TABLE 1:Chengdu Future Residential Projects, Q4/2019 to Q3/2019 Price Index 120 PROJECT NAME COMPLETION DISTRICT DEVELOPER

100 Xiangshan Long Chengdu Shouxin Belief 2019.10 Island Industry Co., Ltd. 80 Shuangnan Yue Shandong Hongshun 100 2019.10 = Tiandi Holding Group 60 Chengdu Chengdu Jincheng Real 2019.10 Q1/2013 40 Changhong Tianyue Estate Co., Ltd.

Chengdu City Chengdu Chengdu Haoyu 2019.10 20 Investment Nanyue Land Purchase Co., Ltd.

Chengdu Port-based Real 0 Leading Yuefu 2019.11 Estate Development Co., Q1 Q1 Q1 Q1 Q1 Q2 Q2 Q2 Q2 Q2 Q3 Q3 Q3 Q3 Q3 Q4 Q4 Q4 Q4 Q4 Ltd. 2014 2015 2016 2017 2018 2019

Source Savills Research Source Savills Research

savills.com.cn/research 2