Chinese investment in real estate development during the first 10 months of 2013 rose 19.2% year-over-year in nominal terms to 6.87T yuan, with residential building investment up 18.9% to 4.72T yuan

Allison Oesterle

BEIJING , November 12, 2013 (press release) – 1. The completion of real estate investment

The total investment in real estate development in the first ten months of 2013 was 6,869.3 billion yuan, up by 19.2 percent year-on-year in nominal terms, 0.5 percentage points lower than that in the first nine months. Of which, the investment in residential buildings was 4,722.2 billion yuan, up by 18.9 percent, 0.6 percentage points lower than that in the first nine months, and accounted for 68.7 percent of real estate development investment.

In the first ten months, the real estate investment in eastern region stood at 3,844.3 billion yuan, up by 17.1 percent year-on-year, the growth rate down by 0.9 percentage points over that in the first nine months; the central region stood at 1,489.0 billion yuan, went up by 20.1 percent, and up by 0.1 percentage point; western region stood at 1,536.0 billion yuan, up by 23.8 percent, and a decrease of 0.5 percentage points.

In the first ten months, the floor space under construction by the real estate development enterprises accounted for 6,164.65 million square meters, up by 14.6 percent year-on-year, decreased 0.4 percentage points over that in the first nine months. Of which, the floor space of residential building construction area was 4,518.67 million square meters, up by 12.1 percent. The floor space started this year was 1,562.75 millions square meters, up by 6.5 percent, while that in the first nine months was down by 0.8 percentage points. Specifically, the floor space of residential buildings started in the year amounted to 1,140.84 million square meters, up by 5.2 percent. The floor space of buildings completed stood at 593.90 million square meters, went up by 1.8 percent, decreased 2.4 percentage points, of which, the floor space completed of residential buildings stood at 463.95 million square meters, went down by 0.8 percent.

In the first ten months, the land area purchased by the real estate development enterprises totaled 266.58 million square meters, a year-on-year decrease of 3.6 percent, and decreasing amplitude increased 0.3 percentage points over the first nine months. The total transaction of land reached 643.4 billion yuan, increased 11.7 percent, the growth rate decreased 2.9 percentage points over the first nine months.

2. Sales of Commercial Buildings

In the first ten months, the floor space of commercial buildings sold stood at 959.31 million square meters, a year-on-year increase of 21.8 percent, and 1.5 percentage points lower over that in the first nine months. Of the total, the floor space of residential buildings increased 22.3 percent, office building increased 30.6 percent, and buildings for business use increased 11.2 percent. The sales of commercial buildings amounted to 6,123.8 billion yuan, an increase of 32.3 percent, and 1.6 percentage points lower over that in the first nine months. Specifically, the sales of residential buildings went up by 32.6 percent, office buildings up by 42.5 percent, buildings for commercial business up by 23.0 percent.

In the first ten months, the sale of floor space of commercial buildings in eastern region amounted to 479.15 million square meters, a year-on-year increase of 24.0 percent, 1.7 percentage points lower than that in the first nine months. The amount of sales stood at 3,792.9 billion yuan, went up by 35.0 percent, and decreased 1.7 percentage points. The sale of floor space of commercial buildings in central region amounted to 244.11 million square meters, increased 22.5 percent, a decrease of 1.1 percentage points. The amount of sales stood at 1,169.2 billion yuan, climbed 31.9 percent, a decrease of 1.7 percentage points. The sale of floor space of commercial buildings in western region amounted to 236.05 million square meters, an increase of 17.1 percent, went down by 1.2 percentage points. The amount of sales stood at 1,161.7 billion yuan, went up by 24.4 percent, a decrease of 1.4 percentage points.

At the end of October, the floor space of commercial housing for sale reached 453.61 million square meters, increased 7.26 million square meters compared with that at the end of September. Of which, the residential buildings for sale increased 4.48 million square meters, office buildings increased 0.28 million square meters, buildings for business use climbed 1.01 million square meters.

3. Sources of Funds for Real Estate Development Enterprises

In the first ten months, the sources of funds for real estate development enterprises reached 9,719.4 billion yuan, up by 27.2 percent year-on-year, 1.5 percentage points lower over that in the first nine months. Specifically, the domestic loans stood at 1,596.9 billion yuan, increased 31.9 percent, foreign investment stood at 41.6 billion yuan, up by 23.4 percent, self-raising funds stood at 3,709.6 billion yuan, up by 17.7 percent, and other sources stood at 4,371.4 billion yuan, up by 34.8 percent. Among the other sources of funds, deposits and advance payments totaled 2,727.4 billion yuan, surged 34.1 percent, personal mortgage loans totaled 1,138.0 billion yuan, ballooned 40.9 percent.

4. National Real Estate Climate Index

In October, the national real estate climate index was 96.88, decreased 0.37 point over that in September.

Investment in Real Estate Development for January-October
Indicators	Absolute Value	Growth Rate Year-on-Year (%)

Investment in Real Estate (100 million yuan)	68693	19.2
Of which: Residential Buildings	47222	18.9
Office Buildings	3649	36.9
Buildings for Commercial Business	9468	26.9
Floor Space under Construction (10,000 sq.m)	616465	14.6
Of which: Residential Buildings	451867	12.1
Office Buildings	22462	24.1
Buildings for Commercial Business	73903	20.1
Floor Space of Houses Newly Started (10,000 sq.m)	156275	6.5
Of which: Residential Buildings	114084	5.2
Office Buildings	5032	5.9
Buildings for Commercial Business	19853	8.4
Land Acquisition Area (10,000 sq.m)	26658	-3.6
Value of Land Transactions (100 million yuan)	6434	11.7
Floor Space of Buildings Completed (10,000 sq.m)	59390	1.8
Of which: Residential Buildings	46395	-0.8
Office Buildings	1335	12.2
Buildings for Commercial Business	6520	6.9
Floor Space of Commercial Buildings Sold (10,000 sq.m)	95931	21.8
Of which: Residential Buildings	85721	22.3
Office Buildings	2040	30.6
Buildings for Business Use	5850	11.2
Sales of Commercial Buildings (100 million yuan)	61238	32.3
Of which: Residential Buildings	51485	32.6
Office Buildings	2779	42.5
Buildings for Commercial Business	5823	23.0
Floor Space of Commercial Housing for Sale (10,000 sq.m)	45361	37.3
Of which: Residential Buildings	29774	40.7
Office Buildings	1700	17.4
Buildings for Commercial Business	8742	31.2
Sources of Funds for Real Estate Development Enterprises 　(100 million yuan)	97194	27.2
Of which: Domestic Loans	15969	31.9
Foreign Investment	416	23.4
Self-raising Funds	37096	17.7
Other Sources of Funds	43714	34.8
Deposits and Advance Payments	27274	34.1
Personal Mortgage	11380	40.9

Real Estate Investment in Eastern, Central and Western Regions for January-October
Regions	Investment (100 million yuan)		Growth Rate Y/Y (%)
Regions	Investment (100 million yuan)	Residential Buildings	Growth Rate Y/Y (%)	Residential Buildings

National Total	68693	47222	19.2	18.9
Eastern	38443	26285	17.1	17.4
Central	14890	10394	20.1	19.1
Western	15360	10543	23.8	22.8

Sales of Commercial Buildings in Eastern, Central and Western Regions for January-October
Regions	Floor Space of Commercial Buildings Sold		Sales of Commercial Buildings
Regions	Absolute Value (1000 Sq.m)	Growth Rate Y/Y (%)	Absolute Value (100 million yuan)	Growth Rate Y/Y (%)

National Total	95931	21.8	61238	32.3
Eastern	47915	24.0	37929	35.0
Central	24411	22.5	11692	31.9
Western	23605	17.1	11617	24.4

Annotations:

1. Explanation of Indicator

The total investment in real estate development this year: refers to the investment of all construction projects for housing, land development projects, public welfare construction and land acquisition costs in the reporting period. The index is cumulatively statistical data based on the principle of image progress.

Area of commercial buildings sold: refer total areas sold of new commercial buildings in the contract during the reporting period (i.e. area of floor space designated in the formal contract signed by both sides). The indicator is cumulative data.

Value of commercial buildings sold: refers to the total contracted vale of new commercial buildings for sale during the reporting period (i.e. the total value of sales for selling of commercial building as designated in the formal contract signed by both sides). This indicator is cumulative data, as well as the sale of floor space of commercial buildings.

The sources of funds for real estate development enterprises in the year: refers to various currencies and sources of real estate development funds actually available by the real estate development enterprises in the reporting period. Specifically, it includes domestic loans, foreign investment, self-raised funds and other funds. The index is cumulative data.

Floor space of buildings under construction: refers to the total floor space of all buildings by the real estate development enterprises during the reference time. Including floor space newly started in current year, floor space of continued construction of the building from the former period, floor space of stopped or postponed in the previous period but recovered in current year, floor space completed during current year, and newly started floor space in current year but postponed. Floor space under construction of multi-storey buildings refers to the total floor space of all stories.

Floor space of houses newly started: refers to floor space of houses newly started by the e real estate development enterprises during the reference time, the unit project as the accounting object. Not including continued construction area of housing which started in the previous period, and restarted construction area in the current year but stopped or postponed in the previous period. Specific due date is subject to starts to housing officially began ground-breaking gouge (ground treatment or permanent piles). Floor space of houses newly started refers to the entire floor spaces of whole building; the calculation can not be separated.

Floor space of buildings completed: refers to housing construction during the reporting period have been completed in accordance with design requirements, achieved to living and conditions of use, acceptance of accreditation standards or to the final acceptance, total building areas could formally handed over to be used.

Land acquisition area: refers to land area by the real estate development enterprises in the year through various ways to obtain land.

Value of land transactions: refers to final amount of transactions of land use rights by the real estate development enterprises. In the primary land market, refers to the final section of land allocation, "auction" price and sale price; the secondary land market, refers to the finalize the contract price on land transfer, lease, mortgage, etc.. Price of land transactions and land acquisition area are the same scope, December calculate the average purchase price of land.

2. Statistics coverage

All real estate development and corporate business units.

3. Survey methods

Collected monthly with complete enumeration (no report in January).

4. Brief description on national real estate climate index

National real estate climate index fluctuations follow by the economic cycle theory, according to the business cycle theory and business cycle analysis, based on the use of time series, multivariate statistical, econometric analysis, use the real estate development and investment as the benchmarks, selected related indicators such as real estate investment, capital, area, sales, conducted by the seasonal factors and random factors, adopting the growth rate cycle method. National real estate index selected year 2000 as the base year, its growth rate set at 100. Typically, the most appropriate level of national real estate climate index is 100, the moderate level is between 95 and 105, the lower level is below 95, and the higher level is above 105.

5. Division on Eastern, Central and Western Regions

Eastern region includes Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, and Hainan. Central region includes Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, and Hunan. Western region includes Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang.

6. Calculation on Growth Rate

The growth rate of real estate investment is nominal growth rate, due to the investment in fixed assets price index was calculated on quarterly, in addition to the January-March, January-June, January-September, and January-December was calculated on computable real growth rate, the other months only calculated the nominal growth rate.

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