China's property market began developing after the government deregulated land supplies in 1992. Residential development started in the late 1990s when the government ended decades-long policy formed during the centrally planned economy period. The policy involved state-owned firms giving free homes to competitive employees.

Housing Fund
The accumulative housing fund was introduced as a pilot program in 1994 in Shanghai. The fund, to which individuals and employers contribute on a monthly basis, offers home loans with lower interest rates. China Construction Bank, currently the nation's largest mortgage lender, made China's first mortgage loan in 1998.

Housing Boom
As the government rolled out a range of policies in favor of the property market to make it the backbone of the economy, rapid development began in 2001, when investment in real estate totaled RMB624.5 billion, or 17% of aggregate fixed asset investment. The amount and percentage rose to RMB1.45 trillion and 24.7% respectively in 2005. In 2012, investment in China's real estate market rose 16.2% to RMB7.18 trillion, where investment in residential space was up 11.4% to RMB4.94 trillion; overall property sales volume was up 1.8% to 1.11 billion m2, where residential space sales volume was up 2% to 984.68 million m2; overall property sales revenue was up 10% to RMB6.45 trillion, where revenue from residential space was up 10.9% to RMB5.35 trillion.

Housing Price
Soaring home prices is the foregone conclusion of haphazard property development, particularly in China's largest cities. For example, home price was RMB3,326 per square meter on average in Shanghai in 2000; it surged to RMB6,385/m2 in 2004 and over RMB22,000/m2 in 2012, meaning the price of a 90m2 unfurnished apartment is 50 times the average annual salary in the city. Home prices in the 100 largest cities averaged around RMB8,700/m2 in 2012.

Containment Policies
To rein in the overheated property market, the government has introduced a set of policies, such as limiting the number of homes an individual or household can buy, lifting discounts on mortgage interest rates and imposing property tax on luxury homes in some cities. The policies have worked to some extent, but it is argued inelastic demand, due to rapid urbanization and the tradition of owning properties, will keep the industry humming in the long run.

Public Housing
China plans to build 36 million apartments for low-income earners in the five years through 2015. These cheap apartments will be rented or purchased far below market prices. However, the funding of the construction and the transparency of applicant assessment are being questioned.

Top 10 Developers by Contract Value
China Vanke Co (residential)
Poly Real Estate Group Co (residential)
China Overseas Land & Investment Ltd (residential + commercial)
Greenland Group (commercial)
Evergrande Real Estate Group Ltd (residential)
Wanda Group (commercial)
China Resources Land Ltd (residential + commercial)
Shimao Property Holdings Ltd (residential + commercial)
Greentown China Holdings Ltd (residential)
Country Garden Holdings Co (residential + commercial)

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