Chinese investment in real estate development in first five months of 2014 up 14.7% year-over-year in nominal terms to 3.074T yuan, with residential building investment up 14.6% to 2.104T yuan: National Bureau of Statistics of China

Allison Oesterle

BEIJING , June 13, 2014 (press release) – 1. The completion of real estate investment

The total investment in real estate development in the first five months of 2014 was 3,073.9 billion yuan, a nominal increase of 14.7 percent year-on-year, 1.7 percentage points lower over the first four months. Of which, the investment in residential buildings was 2,104.3 billion yuan, up by 14.6 percent, 2.0 percentage point lower, and accounted for 68.5 percent of real estate development investment.

In the first five months, the real estate investment in eastern region stood at 1,799.5 billion yuan, up by 16.0 percent year-on-year, and the growth rate went down by 1.7 percentage points over the first four months; the central region stood at 601.3 billion yuan, went up by 10.4 percent, and down by 1.8 percentage points; western region stood at 673.1 billion yuan, up by 15.4 percent, and a decrease of 1.2 percentage points.

In the first five months, the floor space under construction by the real estate development enterprises accounted for 5,860.81 million square meters, up by 12.0 percent year-on-year, decreased 0.8 percentage points over the first four months. Of which, the floor space of residential building construction area was 4,198.83 million square meters, up by 9.1 percent. The floor space started this year was 599.12 millions square meters, down by 18.6 percent, and the pace of decline narrowed 3.5 percentage points. Specifically, the floor space of residential buildings started in the year amounted to 425.88 million square meters, down by 21.6 percent. The floor space of buildings completed stood at 307.00 million square meters, went up by 6.8 percent, while that in the first four months was down by 0.3 percent, of which, the floor space completed of residential buildings stood at 233.88 million square meters, went up by 5.3 percent.

In the first five months, the land area purchased by the real estate development enterprises totaled 110.90 million square meters, a year-on-year decrease of 5.7 percent, and the pace of decline narrowed 2.2 percentage points. The total transaction of land reached 295.4 billion yuan, increased 8.7 percent, a decrease of 0.9 percentage points.

2. Sales of Commercial Buildings

In the first five months, the floor space of commercial buildings sold stood at 360.70 million square meters, a year-on-year decrease of 7.8 percent, and the pace of decrease expanded 0.9 percentage points over the first four months. Of the total, the floor space of residential buildings decreased 9.2 percent, office building decreased 5.8 percent, and buildings for business use increased 0.6 percent. The sales of commercial buildings amounted to 2,367.4 billion yuan, a decrease of 8.5 percent, and the pace of decrease expanded 0.7 percentage points over the first four months. Specifically, the sales of residential buildings went down by 10.2 percent, office buildings down by 14.0 percent, buildings for commercial business up by 2.5 percent.

In the first five months, the sale of floor space of commercial buildings in eastern region amounted to 171.73 million square meters, a year-on-year decrease of 14.4 percent, and the pace of decrease expanded 0.9 percentage points over the first four months. The amount of sales stood at 1,405.4 billion yuan, went down by 14.7 percent, and the pace of decrease expanded 0.7 percentage points. The sale of floor space of commercial buildings in central region amounted to 95.30 million square meters, increased 0.3 percent, a decrease of 2.5 percentage points. The amount of sales stood at 476.5 billion yuan, increased 3.2 percent, a decrease of 1.9 percentage points. The sale of floor space of commercial buildings in western region amounted to 93.67 million square meters, a decrease of 2.1 percent, and the pace of decrease narrowed 0.3 percentage points. The amount of sales stood at 485.5 billion yuan, went up by 1.8 percent, a decrease of 0.3 percentage points.

At the end of May, the floor space of commercial housing for sale reached 534.02 million square meters, increased 7.50 million square meters compared with that at the end of April. Of which, the residential buildings for sale increased 4.05 million square meters, office buildings increased 0.28 million square meters, buildings for business use climbed 1.95 million square meters.

3. Sources of Funds for Real Estate Development Enterprises

In the first five months, the sources of funds for real estate development enterprises reached 4,672.8 billion yuan, up by 3.6 percent year-on-year, 0.9 percentage points lower over the first four months. Specifically, the domestic loans stood at 937.9 billion yuan, increased 16.5 percent, foreign investment stood at 15.0 billion yuan, down by 24.5 percent, self-raising funds stood at 1,822.2 billion yuan, up by 9.8 percent, and other sources stood at 1,897.7 billion yuan, down by 6.4 percent. Among the other sources of funds, deposits and advance payments totaled 1,145.8 billion yuan, decreased 8.4 percent, personal mortgage loans totaled 534.2 billion yuan, down by 1.2 percent.

4. National Real Estate Climate Index

In May, the national real estate climate index was 95.02, decreased 0.77 points over that in last month.

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

Investment in Real Estate (100 million yuan)	30739	14.7
Of which: Residential Buildings	21043	14.6
Office Buildings	1773	16.2
Buildings for Commercial Business	4427	23.6
Floor Space under Construction (10,000 sq.m)	586081	12.0
Of which: Residential Buildings	419883	9.1
Office Buildings	23719	23.5
Buildings for Commercial Business	73698	19.2
Floor Space of Houses Newly Started (10,000 sq.m)	59912	-18.6
Of which: Residential Buildings	42588	-21.6
Office Buildings	2285	-5.0
Buildings for Commercial Business	7864	-11.2
Land Acquisition Area (10,000 sq.m)	11090	-5.7
Value of Land Transactions (100 million yuan)	2954	8.7
Floor Space of Buildings Completed (10,000 sq.m)	30700	6.8
Of which: Residential Buildings	23388	5.3
Office Buildings	802	16.8
Buildings for Commercial Business	3502	2.1
Floor Space of Commercial Buildings Sold (10,000 sq.m)	36070	-7.8
Of which: Residential Buildings	31946	-9.2
Office Buildings	817	-5.8
Buildings for Business Use	2247	0.6
Sales of Commercial Buildings (100 million yuan)	23674	-8.5
Of which: Residential Buildings	19720	-10.2
Office Buildings	1019	-14.0
Buildings for Commercial Business	2337	2.5
Floor Space of Commercial Housing for Sale (10,000 sq.m)	53402	24.4
Of which: Residential Buildings	35283	25.0
Office Buildings	2076	17.5
Buildings for Commercial Business	10142	22.5
Sources of Funds for Real Estate Development Enterprises 　(100 million yuan)	46728	3.6
Of which: Domestic Loans	9379	16.5
Foreign Investment	150	-24.5
Self-raising Funds	18222	9.8
Other Sources of Funds	18977	-6.4
Deposits and Advance Payments	11458	-8.4
Personal Mortgage	5342	-1.2

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

National Total	30739	21043	14.7	14.6
Eastern	17995	12172	16.0	15.5
Central	6013	4301	10.4	13.2
Western	6731	4570	15.4	13.6

Sales of Commercial Buildings in Eastern, Central and Western Regions for January-May
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	36070	-7.8	23674	-8.5
Eastern	17173	-14.4	14054	-14.7
Central	9530	0.3	4765	3.2
Western	9367	-2.1	4855	1.8

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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