Leading Chinese Multifamily Developer Reports Spike in Prices, Income
Beijing--Unlike much of the rest of the world, China still has a famously get-up-and-go residential property market.
Dees Stribling, Contributing Editor
Beijing–Unlike much of the rest of the world, China still has a famously get-up-and-go residential property market. If the latest report about one of the country’s largest real estate developers of residential property–Evergrande Real Estate Group–is any indication, that trend hasn’t slowed down.
Evergrande, which began in Guangzhou (Canton) in the mid-90s, currently owns about 45.8 million square meters (493 million square feet) of real estate and land in more than 20 cities across China. Recently the company released its first mid-year report after being listed on the Hong Kong Stock Exchange, reporting that its 1H10 income was 20.3 billion yuan, or about 11 times its income during the same period in 2009.
According to another recent report compiled by LeJu, the housing portal of Sina Corp. and biggest Internet portal in China, the average contracted sales price for Evergrande properties in August was 6,327 yuan per square meter (about $87 per square foot), representing an increase of 23.9 percent on a year-on-year basis.
In 2009, the average sales price was 5,375 yuan, a price influenced by the financial crisis of 2008 and its aftermath, according to the LeJu report. Since the beginning of 2010, the report adds, Evergrande has adjusted prices in response to market conditions, and adjusted the products it plans to launch.
In August 2010, Evergrande achieved a contracted sales amount of 4.44 billion yuan for 702,000 square meters worth of property. The company’s total August sales were 51.9 percent higher than the same month of 2009, and its sales area increased by 22.6 percent on a year-on-year basis.
The company opened only one project in August — Shenyang Evergrande Metropolis, a multifamily residential property in Shenyang measuring about 1.125 million square meters — compared with July, when Evergrande launched three new projects. Four to five projects will be launched during September; including those new ones, the company will have about 50 projects on sale.