The general information in Changsha’s real estate market in 2005

                                         Source: China Office Center,  www.cnoffice.net

Year 2005 was a period when lots of issues occurred in real estate industry in China because of the macro control policies. Under such situation, Changsha’s real estate industry entered a period for adjustment. Now Changsha’s real estate market was going towards the direction that speculation would be limited, investment would be controlled, rational consuming would be publicized and the goal of keeping the price would be achieved.

Section 1 The general information in the operation of real estate market in 2005.

1. The investment in real estate increased but the constructing speed was slowed.

The accomplished investment on real estate industry in Changsha in 2005 reached 25.635 billion RMB with a growth by 46.4% at a very rapid growth. The Constructed Floor Space reached 19.136 million square meters with a growth by 30.85%, among which the newly constructed space was 7.80 million square meters with a growth by 25.21%. The total floor space accomplished was 5.15 million square meters with a drop by 12.97%. The floor space accomplished for commercial using dropped by 13%. The main reason was due to the increasing number of newly opened projects, larger construction tasks, longer construction period, higher threshold of bank loans and the growth of relevant economic elements. It is expected that the year 2006 will witness a rapid growth on the accomplished spaces for commercial buildings.

2. The floor area of commodity houses which were previously sold increased and the construction of commercial properties and office building increased too.

In 2005, the total commercial floor space approved on sale reached 5.842 million square meters with a growth by 29.94%, among which, the residential building spaces approved on sale reached 4.598 million square meters with a growth by 27.14%, the office building spaces approved on sale was 317,800 square meters with a growth by 48.16%. The commercial space approved on sale was 863,000 square meters with a growth of 137.58%. With the tremendous growth in the spaces approved on sale, the actual selling and renting of office buildings and commercial buildings will definitely face a lot of pressure.

　

3. The consumer desire for purchasing the houses was high and the price increased steadily.

In 2005, the total number of business case on commercial buildings accomplished reached 56,755 with a growth by 46.76% and a total area of 6.39 million square meters with a growth by 41.94% compared to the same period of the previous year. The sum of the money involved reached 16.979 billion RMB with a huge growth by 71.20%. The average price for commercial buildings was 3,030 yuan per square meter with a growth by 10.67%. The average price for residential buildings was 2,539 yuan per square meter with a growth by 6.20%. The social consumption need of commercial housing continued to be huge while the rise of the price continued to be stable and modest.

4．The increment of second level of housing market was slowed and the new policies affected the second level of housing market obviously.

In 2005, the bargain amount of second hand houses reached 17,145 cases, up 25.13% with total area of 1.87 million square meters, up 2.67%. The bargain amount of second hand houses increased obviously. The reasons were the supply of new houses decreased and the influence of new policies on the houses price was brought out.

5. The mortgage of real estate grew and the increment of individual loan for housing was slowed.

In 2005, the total mortgage increased by 23.88% compared with last year. The floor area reached 8.91 million square meters, down 21.07%. According to the mortgage situation, the individual mortgage decreased a little but the mortgage amount and floor area decreased dramatically because of the long building period of commodity houses and the increase of band loan threshold. It was predicted that the mortgage of projects under construction would increase more.

6. The amount of houses remove decreased and the scale of old city renovation reduced

In 2005, there were 3930 households who were related to the houses remove with a total area of 467.5 thousand square meters, down 1.28% and 12.27% respectively. The reason why the amount of houses removes decreased was that the scale of remove and redevelopment was strictly controlled by the macro control policies. At the same time, the increase of the house price and extension of remove period were the main factors which affected the old city renovation.

7. The planed investment in the affordable houses increased.

In 2005, the planed investment reached RMB 1.308 billion yuan, up 16.76%. Affected by the limitation of land requirement for the affordable houses, now several projects were preparing for starting working. As a result, the supply would decrease.

Section 2  The prospect of development of real estate in 2006

The urban planning of Great Changsha will facilitate the full upgrade of Changsha’s real estate.

Several detail supervision policies will be made for regulating the market instead of macro control policies.

The supple of commodity houses will increase a lot which will give pressure to the sale of commodity houses.

The demand is still strong and the development prospect is still bright.

The price of commodity house increases when keeping steadily.

The bargain and the price of second hand houses increase.

Construction of “Qualified Houses” is still the focus of real estate market in 2006.