Inside the Great Wall:Land sales increase in T3/4cities in 5M17

Data from Soufun (SFUN.US) showed that in the first five months of 2017,there were 40 cities with a land sales value of over CNY100bn. Among them,there were many T3/4 cities, 12 of which are not included in the NBS 70 cityprice index series. These cities include Suzhou, Shaoxing, Yancheng, Jiaxing,Foyang, Xuzhou, Changzhou, Cangzhou. Zhenjiang, Zhangzhou, Foshan andQuzhou. (CFI).

    Deutsche Bank’s comment: Developers are looking for opportunities in low-tiermarkets where the policy environment is relatively relaxed compared to that ofT1/2 cities. Moreover, land supply is relatively tighter, and intense competitionalso encourages developers to switch to T3/4 markets, which have a betteroutlook.

    According to a report by Hong Kong Property Services (IC&I), industrialbuildings recorded 1,780 transactions (up 84% yoy) in first five months of thisyear, for a total turnover value of HK$11.9bn (up 48.2% yoy). Amounting to atotal of HK$1.4bn, 768 transactions of HK$3m or below made up about 43.1%of total transactions. Alvan Chan, director of the agency, expects transactionvolume of industrial buildings to continue to increase, resulting in a relativelyattractive price level compared to that of office buildings. (HKET)