The Land Market Of Guangzhou And Shenzhen Is Going Up, And The Pattern Of Supply And Demand Is Changing

Near the end of the year, developers are trying to sell their houses to boost their performance, and the "three red lines" have reached the top, but they have not been able to absolutely stop them from seizing land in Guangdong, Hong Kong and Macao, especially in Guangzhou and Shenzhen.

Since the middle of November, Guangzhou, Shenzhen, Zhuhai and Foshan have been auctioning lots of land in succession. Among them, the land king of "flour is more expensive than bread" and the land with a premium rate of 45% has still appeared. Developers are full of enthusiasm.

Compared with the previous situation, more and more large-scale enterprises in the real estate and financing area have been focused on the new town.

The relatively prosperous new housing market in Guangzhou and Shenzhen is the foundation for developers to take land actively. Even if they sell their houses, they can still raise their turnover. Such assets are much better than many houses that can't be sold at all.

For the government, the regulatory thinking is also changing. Guangshen, especially Shenzhen, has shifted from suppressing demand in the past to increasing supply, changing the structure of supply and demand, affecting future expectations, or making housing prices in the two places tend to be stable.

Guangzhou, Shenzhen and Dongguan are the cities with great pressure on house price rise this year. Photo by Gan Jun

Local shooting war at the end of the year

After last year's "Shengdi" epic auction, it ushered in a rare land auction in Shenzhen.

On November 23, there were eight land leases with a total construction area of 2.24 million square meters in Shenzhen, attracting 28 real estate enterprises to sign up, and the final total land price was about 34 billion yuan.

In addition to local leading real estate companies such as Vanke, Jindi and jiazhaoye, there are also foreign real estate enterprises such as rongchuang, Jinmao, Xincheng and Xuhui, as well as ping an real estate, Hong Kong China Travel Service and CITIC chengkai.

Among them, rongchuang + HUAFA jointly won the Shajing plot in Bao'an District with a base price of 12.71 billion yuan, which was the highest land parcel with the highest transfer price on that day, and was also the seventh plot with 10 billion yuan in Shenzhen history.

Rongchuang has won an ice snow cultural and tourism complex with a construction area of 1.31 million square meters. Previously, rongchuang has signed a cooperation agreement with Bao'an District with a total investment of 36.7 billion yuan, which is the largest single investment project of rongchuang in Dawan district so far.

Shenzhen Metro Group won Longhua District plot with a base price of 6.653 billion yuan. After the completion of the parcel, the average selling price of ordinary commercial housing shall not be higher than 70875 yuan / m2.

High premium plots have also emerged. For example, after 25 rounds of bidding, Vanke finally won the most competitive jiangangshan plot with the highest price limit of 5.998 billion yuan, with a premium rate of 45.02%, and the construction of talent housing of 66000 square meters. In the future, the average sales price of commercial housing should not be higher than 83265 yuan / m2.

In recent years, Vanke rarely took land in the Shenzhen open market. This move is also its first entry into jiangangshan. It seems that Vanke's judgment of Shenzhen market has changed.

In addition, after 26 rounds of bidding, jiazhaoye + Xincheng consortium also won the Pingshan District plot with a ceiling price of 2.8 billion yuan, with a premium rate of 45% and the construction of talent housing of 50000 square meters.

Many people still remember the "epic land auction" in Shenzhen on June 26 last year, and the total land price of the land auction battle on November 23 was 1.5 times that of last year's 22.4 billion yuan.

Meilian property statistics show that the total amount of residential land transfer in Shenzhen (including Shenzhen Shantou cooperation zone) is as high as 75.8 billion yuan this year. With non residential land, the land transfer amount has reached nearly 90 billion yuan. Although less than Shanghai, Hangzhou and other cities, but also Shenzhen in the past three years to sell the largest amount of land in a year.

Not far away in Guangzhou, there was a land war in the morning. On November 16, after 21 rounds of bidding, Guangzhou local real estate enterprise Hejing Taifu won the transfer of the land on the north side of Tianhe Olympic Park with a total price of 4.865 billion yuan and a floor price of 51463 yuan / square meter.

This is the homestead that the dairy plate sold again after six years. Although the prices quoted by the real estate enterprises were relatively cautious, the final transaction floor price of 51463 yuan / square meter set the highest floor price record in Tianhe; it also became the third most expensive plot in the city, after the Yuexiu South Road plot of 64576 yuan / m2 and the Haizhu Shigang road plot of 55437 yuan / m2.

The price of the plot is close to or higher than the price of many new or second-hand houses being sold around. Xiao Wenxiao, chief market analyst of Guangzhou Kerui, believes that the floor price "breaking 5" shows the optimistic attitude of real estate enterprises. This year, most of the land in the central area of Guangzhou was sold at a high premium, while the land in the peripheral areas was mostly sold at the bottom price, which is more like the conservative and focused strategy of real estate enterprises in an uncertain era.

The local film war was also staged in Zhuhai. On November 25, China Shipping real estate won a new land price of land king in Zhuhai central city with a floor price of 23281 yuan / square meter and a total price of 10.47 billion yuan.

The other two cities in Dawan District, Dongguan and Foshan, whose GDP was just over one trillion last year, are more frequent this year.

The heat of the land market is closely related to the sales market. Only when the developers are optimistic about the future market can they dare to take the land, and selling at a high price can stimulate the heat of the new housing market.

Guangzhou, Shenzhen, the recent new housing market is booming. According to the monitoring data of Guangzhou Zhongyuan, the number of online signatures for new houses in Guangzhou exceeded 10000 in October, up 16% month on month and 84% year on year, the highest since April 2017.

In November, new housing transactions in Huangpu, Nansha and other regions were active, driving the transaction of Guangzhou city to further improve. Guangzhou buyers gradually feel that the property market is hot.

In Shenzhen, the new housing market "hit the new" heat has never stopped. The fourth phase of China Resources City with an average price of 130000 yuan / m2 entered the market, attracting the attention of the whole city.

Developers are optimistic about Shenzhen property market. A developer from East China said the company had already prepared funds to seize the land in Shenzhen. "If you go around the country, you will know that few cities can digest (houses) as well as Shenzhen."

They get land in Guangzhou, Zhuhai, Dongguan and Foshan, which is the same logic. The market is good. Guangdong, Hong Kong and Macao have become more and more important places for real estate enterprises. The value of goods and sales have accounted for one third or one fourth of some real estate enterprises.

Under the concentrated land auction of high land prices, the pressure of rising house prices in Guangzhou and Shenzhen is not small, and the owners of second-hand houses in some regions have already returned their prices or raised their listing prices.

Turn to increase supply

The other side of the optimism of developers and investors is that from the perspective of government and policy, the situation is changing, and Beijing and Changsha should be more imitated.

Guangzhou, Shenzhen and Dongguan are the cities with great pressure on house price rise this year. In the past three years, Beijing has provided a large number of land for restricted competitive housing, and millions of square meters of low-priced houses have been put into the market, which has greatly eased the pressure of rising house prices, and even triggered the continuous decline of second-hand house prices.

Intermediaries pointed out that in the past three years, the second-hand house prices in several regions of Beijing have fallen by more than 20%.

Another city worth learning from Shenzhen and Dongguan is Changsha. Local governments also provide sufficient supply and stabilize house prices through large-scale land transfer.

Unlike Beijing and Changsha, which not only increases supply but also restrains investment demand, Shenzhen has not only very little supply in the past few years, but also leaves a gap for purchase restriction due to easy settlement. In fact, Shenzhen has been weak in restraining investment demand.

In the middle of this year, after the relevant departments of Shenzhen went to Changsha to study, they issued a new policy on July 15, which upgraded the policy of settling down and buying houses, and the investment demand was effectively controlled.

Then there was an increase in supply. Many insiders in Shenzhen pointed out that the scale of the "luxury" land auction in Shenzhen is far larger than before. The message is that the government is trying to increase housing supply substantially in Shenzhen, where residential land is scarce for a long time.

In fact, such information already exists. In April, the Shenzhen Bureau of housing and urban rural development said that the proportion of residential land will be increased to 25% in 2021 (the current situation is less than 23%); in August, Shenzhen planning and Land Commission also disclosed the new plan that "by 2035, the proportion of residential land will be increased to 25%".

Song Ding, a real estate expert in Shenzhen, also believes that the painting style of Shenzhen's housing policy has changed. In the past 20 years, the policy focus of housing field is undergoing dramatic changes. For a long time, the regulatory policy orientation with suppressing demand as the core is rapidly changing to the development policy orientation focusing on increasing land supply and meeting residential demand.

First of all, as long as there is a reasonable way to solve the problem of land supply in Shenzhen, as long as there is a reasonable way to solve the problem of land supply in Shenzhen in the long-term, it is not necessary to rely on the land supply mode of Shenzhen for a long time.

This also shows that although Shenzhen can not compare with Beijing, Shanghai and Guangzhou in terms of land scale, there is still considerable room for deep expansion in land use. If effective excavation is carried out, the total supply of residential land and housing in Shenzhen can be greatly increased.

In fact, other big bay cities are also like this. In recent years, the land transfer fees in Guangzhou far exceed those in Shenzhen, and the land supply in each district of Guangzhou is sufficient.

Foshan is a sample of land supply this year. According to statistics, in the first half of 2020, there were 50 land sales in Foshan local auction market, with a transaction area of 2.61 million square meters and a transaction amount of 58.4 billion yuan, a record high.

The change of the government's control ideas and the increase of land supply will directly change the current supply and demand pattern of the real estate market and make the two tend to balance.

Zhang Bo, chief analyst of anjuke Real Estate Research Institute, believes that as the demand is digested, the heat of Guangzhou market will probably cool down, but the hot areas may still maintain a certain volume, and the rise of transaction price will be weak.

Song Ding pointed out that the impact of Shenzhen's new policy is that the housing supply has increased significantly. It is estimated that the annual supply will increase by more than 30% or even higher; the average housing price will tend to be stable on the whole, but the regional differentiation will be increased; the regulatory policies mainly used to limit the demand side will be moderately weakened, and some short-term policies may withdraw.

In the future, the probability of a substantial rise in housing prices in any city in the future will be lower.

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