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Bright prospects for real estate market in 2013
By Cherry Cao

THE real estate market in China has bottomed out and will probably extend its momentum in the first half of this year with key indicators continuing to register steady growth, according to a report by E-house China R&D Institute, a major property services provider and research organization.

Land acquisitions

China's land market will continue to gain strength in 2013 with overall transaction volume expected to rise 10 percent from last year. Ever-recovering property sales registered across the country, particularly since the second half of 2012, have notably boosted real estate developers' confidence as well as their cash positions, increasing their appetite for land expansions. Moreover, recent promises by the Ministry of Land and Resources to increase supply is going to trigger land sales this year.

Investment for real estate development

With continuously improving industrial environment, China's investment in real estate development will likely climb 22 percent from 2012. This reflects the fact that many affordable housing projects will get underway this year, with construction to begin on 6 million units.

Meanwhile, recovering sentiment among developers will lead to more aggressive investment in commodity housing development.


The rate of groundbreaking is expected to pick up significantly this year, with an estimated annual growth of 12 percent in terms of gross floor area. More optimistic market prospects, improving capital conditions and a comparatively low 2012 base will enable developers to register a double-digit growth in 2013.

Property sales

Real estate sales are expected to climb at a faster rate than 2012, at around 15 percent in 2013. This is the result of continuous support from the central government to bolster end-user demand, an ever-improving funding environment and continuously robust demand from both first-time buyers as well as home upgraders.

Land prices

Prices for land may increase 15 percent this year because of recovering sentiment in the market and a comparatively low supply. This compares to a 3.5 percent year-on-year growth in land prices registered in 2012.

Property prices

The prices for new property is likely to continue heading north, at an estimated annual increase of around 8 percent. The increase will mainly come from accelerated growth in first and second-tier cities where measures to curb speculation have been vigorously imposed. Another reason is stabilized prices in third and fourth-tier cities.

Tracking home prices

An index compiled by the National Bureau of Statistics monitoring price fluctuations in 70 major Chinese cities will climb steadily in 2013 as sentiment continues to extend all around the country. By the end of December, home prices in the 70 cities will likely rise 3 percent year-on-year, even if new austerity measures might be introduced by the central government following a too-rapid market recovery.

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