Real Estate Development in Changchun by Anney Kong Qing Qing
INTRODUCTION
Changchun City was built in 1800, and it was a special city, then it was the center in Jilin Province in 1954, and it’s the center for politics, economy, and culture. The location is predominant, the natural resource is luxuriant. The whole city acreages are 20571sq.km. There are six areas, they are: Chaoyang, Nanguan, Kuancheng, Erdao, Liuyuan, Shuangyang, there are three prefecture cities, they are: Yushu, Jiutai, and Dehui, and there is the Nongan County. There are 38 nationalities, like Han, Man, Hui, Zhuang, Korea, Mongolia, Xibo, and so on.
Changchun is the Car City, is an important foodstuff base, and is a technology and culture city. So it’s the undulation of realty can influence the whole Jilin Province.
There is an external periodic fluctuant phenomenon when the realty is developing, in general, the realty cycle is the realty economical level fluctuant undulation, and is the economic phenomena of cyclical circulation. On the one hand, there is the different characteristic in the realty undulation, always exists obviously similarity, this orderly industrial undulation had reflected the realty economical undulation similarity and regularity, even in the realty operating process, the expansion which the realty economical level can show are the presents and contracts, and they appeared alternately. On the other hand, although the realty undulation in the margin of fluctuation, and the vibration frequency, had the obvious difference, each characteristic of the realty in essentially also is same; all displays the similar periodicity to fluctuate, the duplicated reappearance.
The main objective is to analysis realty cycle undulation, is helpful to instructs the realty in the practice and the correlation service to develop. The realty is a core business in various commercial banks, so the housing is the competitive focal point for commercial banks. Therefore, we develop to research the realty cycle undulation, through the data analysis and the comparative analysis, may understand the development condition of our country realty, will forecast the next development tendency.
REVIEW OF LITERATURE
The realty cycle has 5 stages; the undulation factor of each stage has the difference: (Stephen A.Pyhrr)
1. The first stage, the unemployment rate is high, the economic system presents the outstretched aspect, the government implements the outstretched and macroscopically financial policy, at the same time adopts the moderate inflation, the mortgage loan rate is low, the population and the family scale increases, but the receive also assumes the increase tendency.
2. The second stage, the realty transaction tends to actively, the house price is rising, the cost is increase, the house selling is good, the investment and the speculator enter to the market, the mortgage loan rate is reduce, thus causes the house demand to expand, the house supplies need to enhance to satisfy the unceasing demand.
3. The third stage, the realty demand starts to increase, but because of the developer investments to construct the house to create the supplies too much, the realty market tends to saturated, the fact of stores goods with the vacancy starts to increase, the investment profit is drop, at the same time the macroscopic economical aspect also appears the inflation is rise fast, the interest rate is rise, the loan is difficult, the house price starts to drop.
4. The fourth stage, the realty tends to stable, the house selling is difficulty, and the vacancy rate is rise.
5. The fifth stage, the macroscopic economic tends to stable, the unemployment rate is increasing, and causes the real income because of the inflation to drop, credit is squeezing, the rate is rise, then the realty cycle undulation is drop.
Looked from the deal price, in the first half year, the price of the increasing of house transaction is 2219.9RMB/square meters, the increasing of house deal is 2104.5RMB/ square meters, the price of commodity apartment deal is 2337.5 RMB/square meters, the commodity housing deal is 2209.8 RMB/square meters, the commodity non- housing deal is 3273.9 RMB/square meters, the economy is suitable the room to deal is 1641.5 RMB/square meters, the storage quantity house deal price is 1387.2 RMB/square meter, the storage quantity housing deal price is 1288.6 RMB/square meters. (Source:http://www.jilin.cei.gov.cn/content.jsp?id=9746&catalogID=1)
Looked from the total quantity of transaction, in the first half year, the real estate transfer to deal 21,330 sets, the deal area is 2.141 million square meters, with the same ratio increases 0.7 square meters, with compares micro rises 0.3%; The deal amount is 4.11 billion RMB, with the same ratio reduces 0.9 million RMB, with the same ratio drops 2.2%. Source 
IBID)
According to the above data, the Changchun does some analysis:
The first one is the commodity apartment supply structure tends to reasonably; the house price still had the rise space.
In the first half year, the area for the Changchun commodity apartment can sells was 2.419 million square meters, include: housing was 2.057 million square meters. According to different wrap newly built commodity housing supply structure analysis: 90 square meters below center small families account for the total quantity 19.1%, enhanced 3.8%, 90-144 square meter compared to the last time accounts for the total quantity 55.9%, enhanced 3.8 percentage points compared to the last time, but 144 square meter above big household accounted for the total quantity 25%, dropped 7.3 percentage points compared to the last time.
Result demonstration that, The Changchun authorization sells in advance the ordinary commodity housing has accounted for the total quantity 2/3, the high-grade merchandise housing only accounts for the total quantity 1/3. Showing at present the Changchun commodity housing supply structure tends to reasonably. Source IBID)
According to different price position newly built commodity apartment supply structure analysis: The house price in 2,000 Yuan/square meter below housing accounts for the total quantity 31.4%, dropped 6.1 percentage points compared to the last time; 2000-3000 Yuan/square meter housing accounts for the total quantity 51.9%, enhanced 4.6 percentage points compared to the last time; 3,000 Yuan/square meter above housing account for the total quantity 16.7%, enhanced 1.5 percentage points compared to the last time. Source IBID)
The explanation could be that the authorization sells in advance the commodity housing the price position center of gravity to move in on, the first half year, the Changchun authorization sells in advance the commodity housing even price 2550.5 Yuan/square meters, explained in a nearly year, the Changchun commodity home price also has 20% to rise spatially，From now on will live the house price tendency rising:, the small scope will rise. Source IBID)
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Second, the accumulation may sell the room source sufficiently up to the first half year, Changchun accumulates may sell the commodity apartment 2.73 million square meters. Among: The housing 2.451 million square meters, in the accumulation may in the seller housing: 90 square meters below center small families account for the total quantity 15.8%, dropped 4.3 percentage points compared to the last time; 90-144 square meter center household accounts for the total quantity 52.3%, dropped 7.1 percentage points compared to the last time; But 144 square meter above big household accounts for the total quantity 31.9%, enhanced 11.4 percentage points compared to the last time.
This indicated that, Center the small family ordinary commodity housing sale tends to exuberantly, the big household upscale housing tendency reduces palely.
The third is the increase room transaction is exuberant, business volume large scale growth first half year, Changchun increase house deal cycle of songs 12,720 sets, deal area 1.373 million square meters. The same ratio increases 324,000 square meters, the same ratio grows 30.9%. The average deal price is 2,220 Yuan/square meters, with is more impartial than. The deal amount is 3.05 billion Yuan, the same ratio increases 710 million Yuan, and the same ratio grows 30.3%. Among: The housing deal cycle of songs is 11,654 sets; The deal area is 1.235 million square meters, the same ratio increases 277,000 square meters, the same ratio grows 28.9%; The deal amount is 2.6 billion Yuan, the same ratio increases 620 million Yuan, the same ratio grows 31.4%. The average deal price is 2104.5 Yuan/square meters; the same ratio grows 2%. The house price trend is steady. Source IBID)
Based on early this year Changchun real estate market statistical analysis, the Changchun forecast that:
First is the market supply and demand total quantity basic balance, for is bigger than the trend which asks, the land supply, the room source supply extremely is all sufficient; Second, in the increase the small family, center the low end housing proportion unceasingly increases, the market supplies structure hastens the reasonable trend; the third is the trend which the house price assumes steadily
First , looked from the deal region arrangement that: the green garden, Chaoyang, Nanguan, Erdao, Kuancheng, and Shuangyang the discrimination do not account for the transaction total quantity 25.9%, 24.3%, 23.1%, 18.3%, 5.3%, 3.1%.
Explained: The green garden, Chaoyang, and Nanguan area still was the active region which the resident which want to buy housing. Source IBID)
Second, looked from the deal price sector: 1,000 RMB/square meter below prices positions account for the transaction total quantity 5.7%; 1000-1500 RMB/square price of rice position accounts for the transaction total quantity 20.8%; 1500-2000 RMB/square price of rice position accounts for the transaction total quantity 32.3%; 2000-2500 RMB/square price of rice position accounts for the transaction total quantity 16%; 2500-3000 RMB/square price of rice position accounts for the transaction total quantity 8.8%; 3,000 RMB/square meter above price position accounts for the transaction total quantity 16.5%. Source IBID)
Explained 2,000 RMB/square meter below the price position accounts for the transaction total quantity 58.8%, the increase housing finalized a deal the even price is 2104.5 RMB/square meters, is lower than finalized a deal the even price increase housing to account for the total quantity 62%, is higher than finalized a deal the even price increase housing to account for the total quantity 38%. In the explanation deal price position sector moves, therefore, the average deal price index rises 1.9 percentage points. The statistical result showed that, Center the low end housing receives very much in the market welcome.
Third, looked from the deal household: below 90 square meters accounts for the transaction total quantity 28%; 90-144 square meter accounts for the transaction total quantity 47.6%; Above 144 square meters accounts for the transaction total quantity 24.4%.
The statistical result showed that, Center the small family is favored the resident, this indicated Changchun to the commodity housing exuberant demand, the Changchun commodity housing supply, the reserve is quite sufficient, the supply and demand total quantity still assumed for is bigger than asks the aspect, thus guaranteed the house price steady trend.
Forth, looked from the deal land sector that: The four levels of land sectors account for the total quantity 32.2%, the five levels of land sectors account for the total quantity 26.4%, the six levels of land sectors account for the transaction total quantity 13.4%, the three levels of land sectors account for the transaction total quantity 10.3%. But one, two levels of land sectors only account for the transaction total quantity 9.9%, three, five, six levels of land sectors account for the transaction total quantity 82.3%. Because the transportation unceasingly facilitates, the common people choose the housing place gradually to be far away the urban center. Source IBID)
Storage quantity housing transaction situation analysis deal region arrangement: The green garden area, Chaoyang District, Nanguan area, Erdao areas, Kuancheng area, and Shuangyang area accounts for the proportion respectively is 31.1%, 24.6%, 18.9%, 12.7%, 10.5%, 2.2%. The green garden area, Chaoyang District, Nanguan area storage quantity room transaction is active. Deal price: 1000-1500 RMB/square meter accounts for the transaction total quantity 43.4%; 1501-2000 RMB/square meter accounts for the transaction total quantity 28%; 1,000 RMB. Below M square meter accounts for the transaction total quantity 15.2%, but is higher than 2,000 RMB/square meter above then only accounts for the transaction total quantity 13.4%, the housing finalized a deal the even price is 1288.6 RMB/square meters is lower than finalized a deal the even price storage quantity housing to occupy the transaction total quantity nearly five tenths. Source IBID)
Household: 60-80 square meter accounted for the transaction total quantity 30.6%, below 60 square meters accounts for the transaction total quantity 24.7%, 80-100 square meter accounts for the transaction total quantity 15.4%, above 100 square meters accounts for the transaction total quantity 29.4%, 80 square meters below center small families is still tight in the second house market.
Deal land sector: Four levels of land sectors account for the transaction total quantity 24.2%; five levels of land sectors account for the transaction total quantity 18.9%; three levels of land sectors account for the transaction total quantity 17.3%. But one, two levels of land sectors only account for the transaction total quantity 22.7%; Third, four, five levels of land sectors are the storage quantity room transaction active land sectors. Source IBID)
RESULTS&DISCUSSIONS
In 35 major cities, Changchun’s house price with is the lowest, is only 1.9%. This rate of increment meant what?
Changchun and Shenyang all are northeast, but why the disparity of house price is so big?
The low price room increases can influence the increase scope
Why the house price of Changchun is low, that’s because of the development pattern was change, the judgments of developer from develop upscale commodity apartment in city center to suburb. In 2004 the development total quantity of Changchun economy house are more than 2.3 million square meters, the area of new economy house is approximately 1.9 million square meters. Moreover, because government has increased the transformation dynamics of shantytown year by year, the house of the middle and low price still will be developed, so the price was pulled lowly, but these can’t influence the sell price of all building. We can see that more the middle and low price was pulled the whole price, and made the whole real estate market show the aspects that supply and demand is prosperous.
The reason for the business volume difference is disparate
Actually, this kind of development phenomenon also similarly exists in Shenyang, but last year Shenyang has completed the sales work of two “5 million”, namely the increase real estate business volume surpasses 5 million square meters, the storage quantity real estate the business volume surpasses 5 million square meters.
Compares with Shenyang, last year the real estate business volume of Changchun increase only was 3.83 million square meters, the business volume of storage quantity is only 1.67 million square meters, differed 4.5 million square meters in the overall. So far, the business volume of Changchun real estate market has surpassed to the last year level, but compares with Shenyang, at least differs 1 million square meters.
If by each square meter 2,500 RMB to commutated, then the house price in Shenyang at least high 500-600 RMB/square meters compared to the Changchun, and in each time the statistical data all is dissimilar, the first third quarter it is possible the middle and high price house sales is better in Shenyang, but in Changchun the demand quantity of the low price house is bigger, this is main reason that the house price disparity so big.
(Source:http://jilin.mofcom.gov.cn/column/print.shtml?/sjshangwudt/200412/20041200008474.com)
Supply and demand decide the price to rise and drop
In addition, there are 7 cities that the price is more than 10%, they are: Nanchang, 23.7%, Shenyang, 16.5%, Chengdu, 15.1%, Shanghai, 14.9%, Tianjin, 12.6%, Xiamen, 11.2%, Fuzhou, 10.5%.
Then, how the land transaction price can influence the house price in Changchun? The height of land transaction price can affect the house price, but the house price deicide to rises or falls by the relation of supply and demand in the market, the type of market decide the house price. At present, the land transaction price and the house price are coordinated basically in Changchun. Therefore, compares with other cities, Changchun’s house price increase scope is not too big. Source IBID)
The house price grows steadily is a good thing.
In the recently years, the real estate market in Changchun throughout is in continues, the health rationally, sends the exhibition period, the house price also all rise small, does not have “the froth”, this is a good thing for the consumers. In the recent ten years, the resident average per person floor space must grow 0.8 -1 square meters in Changchun every year, the developer wants to construct the product will be satisfied, will to be able to use the new material, the new technology certainly, this can bring the development of the cost and the increase. Moreover from the end of last year until now, the raw material is rising continuously; this also will have the influence to the house price, for the completed regarding building of this year, the house price increase scope not too obvious, if the next year raw material price still is high, the house price rise is inevitable.
CONCLUSION
During the process of the writing this paper, people can get some information:
Pays attention one
The house price of Changchun at present is stable the increase scopes of 2.1%, 4.2% and -0.1% can meant what? “This explained the house price of Changchun is stable extremely. Moreover this kind of stabilize in the country appears after to purchase two year in the second house to levy 5.5% business taxes the policies to be stable. But this policy truly shows results the time to be supposed to be 5 years to 8 years.
(Source: http://www.jl.xinhuanet.com/newscenter/2005-07/14/content_4637298.htm)
Pays attention two
The resident questioned the average price of commodity apartment.
The average price of new built commodity apartment of Changchun only has 2510 RMB? Demonstrated according to a real estate profession statistical table at the first quarter of this year in Changchun, we can see, the first quarter of this year, the Nanguan area, the Kuancheng area, Chaoyang District, Erdao areas, and the green garden area, the price of housing finalized a deal respectively is 1850.5 RMB, 3043.4 RMB, 2967.3 RMB, 1942.7 RMB and 1937.8 RMB. But houses quantities between 2,500 RMB to 3,500 RMB in Changchun in the complete house quantity is 26.7%, 3,500 RMB above house quantity occupy the complete house total is 7.8%. Then if the house proportion in Changchun below 1,500 RMB is 34.6%, also will be very difficult to make the house price average value to pull 2,500 RMB in Changchun. Source IBID)
Pays attention three
The house price will rise is the inevitable trend
The price will rise is inevitable trend of the house price in Changchun, the house price rise also is the Changchun economy moves towards the comprehensive opening the symbol, from 2000 to 2004, the total transaction area of street real estate market of Changchun turned 3.26 times. This indicated the future several years, the Changchun resident further will increase to the house demand. Although every year has the massive newly built houses to be completed, but estimate next year the Changchun house supply and demand difference shrinks by this year 1.55 million square meters to 800,000 square meters, to 2007, this kind for will be bigger than the condition which will ask thoroughly to reverse. In 2008 for the condition which will be smaller than asks. Then at that time also will be the start which the Changchun house price climbs.
The author also can provide some suggests when people is considering whether buy house and where is the fitness for them. In this paper we can know the house price must be rise, so some business can buy more houses to do the business, you must make more profit.
Bibliography
Wanglei, 2006, Jilin Economical Information website
Available from: http://www.jilin.cei.gov.cn/content.jsp?id=9746&catalogID=1
[Accessed: 4th July, 2006]
City Night newspaper 2005
Available from: http://www.jl.xinhuanet.com/newscenter/2005-07/14/content_4637298.htm
[Accessed: 17th July, 2006]
Jilin Mofcom website 2004
Available from: http://jilin.mofcom.gov.cn/column/print.shtml?/sjshangwudt/200412/20041200008474.com
[Accessed: 24th July, 2006]
One Response to “Real Estate Development in Changchun by Anney Kong Qing Qing”
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September 1st, 2006 at 1:41 am
As I am not from Changchun, I did learn a lot about the price trends about the real estate markets.
The points given about the supply and demand of housng was apt and did explain some pecularities existing in the present real estate market in Changchun.
The last paragraph ends by saying that it is still on an upward rise is something I do agree. But the question begets, when will the bubble burst, is probably the main worry of all speculators.
A well-thought out piece of article.