Property Market

MAINLAND CHINA
Beijing and Shanghai
No Single Market
A series of markets within a market –
primary, secondary and tertiary cities
Limited quality product
Absence of a secondary market
Lack of transparency and consistency
Real efforts being made to wipe out
corruption and speculation at official level
Still an emerging market
No Single Market (continued)
Government tightening controls over land
market – vast amounts of agricultural land
already lost illegally to development
Growing foreign investor influence
Mainland China looks very much to Hong
Kong and other international centres as
examples for future policies
Housing Provision
Over 40% of population live in urban areas –
some 550 million people
Average living space increased from 4 sq.m. in
early 1980’s to 22 sq. m. today
Housing reform in 1998 – move away from
traditional allocation as part of employment to
open market as main channel of provision
Commercial housing growth since 1998
averaged 35% per annum
Estimated 82% of allocated public housing has
already been sold to workers/employees
Structure of the Housing Market
Each city operates as a separate market
Commercial commodity housing – merged
foreign and local markets
Issue of affordability
Price to household income ratio 10-15 times
Subsidised affordable housing – flagrant
breaches of terms of sale
Public rental housing – rents controlled, 400:1
price to rent ratio
 O. $800

L. $500

M. $400

K. $500
N. $400

A Hong Kong Island

B Kowloon
C Tseung Kwan O
D Sha Tin
E Ma On Shan
F Tai Po
Tuen Mun, Yuen
G
Long, Tin Shui Wai
J. $1,000
H North P. $300

I Tung Chung
H. $2,000
J Shenzhen
K Zhangmutou F. $2,400

L Dongguan G. $2,200 E. $2,600

M Panyu D. $2,800
N Shunde
O Guangzhou B. $3,500
C. $2,800
I. $2,400
P Zhongshan Q. $600

Q Zhuhai A. $4,000
R Macau R. $700

* Unit rate expressed in HK$ per square foot (gross floor area)
Mainland China – Private Housing
Mainland China – Government Housing
Office Market
Major centres are Beijing and Shanghai
but Guangzhou and other secondary cities
(Tianjin, Suzhou, Hangzhou) also provide
Grade A office accommodation
Available for lease or strata title purchase
Rents range from US$35 psm per month
in Shanghai to US$7 psm per month in
lesser cities
LG Tower, Beijing
Retail Market
Very active market currently
Several projects underway of 1m sq.
metres GFA and above
Frequently sold on strata title basis but
market learning that this is not satisfactory
in the longer term
International brand tenants in major
centres in Beijing, Shanghai, Guangzhou,
Shenzhen, etc.
Fortune Plaza, Beijing
Market Prices and Yields
Residential
1. Luxury US$1,500 per sq.m.
2. Mass US$750 per sq.m.
Yield 8-9%
Office (Grade A) US$2,500 per sq.m.
Yield 8-9%
 PPS
Thank You!

Professional Property
Services Limited