Developers Focus on 2nd-Tier for Land Purchases

iFeng: 二线城市重新成为房企拿地“主战场”
Since the beginning of this year, second-tier cities have again become the main battlegrounds for housing companies to win land. According to the statistical data of Yiju Kerui, the second-tier cities have attracted wide attention and accounted for 67% of the top four housing companies in the first four months of this year. Statistics from the Centaline Property Research Center show that as of May 21, the amount of land sold in the top 50 hotspot cities was as high as 1.32 trillion yuan, up 49% year-on-year, of which 46 cities had land transfer fees exceeding 10 billion yuan.

"From the perspective of inventory size, the current inventory scale of many provincial capital cities has witnessed a clear year-on-year decline. This is also the reason for the recent policy adjustments in such cities, which explicitly proposes to actively increase the supply of land for compensation." Shanghai E-House Research Institute Yan Yuejin, research director of the Think Tank Center said. The most popular cities are concentrated in the central and western regions.

According to the research report of Ke Ruirui, “The cities where TOP50 housing companies have concentrated investments are mainly Zhengzhou, Chongqing, Changsha, Chengdu, and Wuhan. The introduction of these cities has led to a large number of population inflows that have stimulated The potential demand for home purchases has also been the focus of investment by property developers, among which the most-invested housing companies in the January-April period are Zhengzhou, and country houses such as Country Garden, Sunac, and Agile are all acquiring properties in Zhengzhou.

However, most people in the industry are not surprised by this situation. According to Chen Yunfeng, secretary-general of the China Real Estate Managers’ Union, “The second-tier cities’ rush to grab people” is not only related to the macro level, but it is a wave. It is a crowd of Chinese cities that has already shown a relocation intention.” It can be said that under such circumstances, the Enterprises entering second-tier cities are also an inevitable choice for the market.

“For housing companies, the key to finding market opportunities is to seek the best balance from the perspectives of economic development prospects, population mobility trends and the severity of real estate regulation. With the formation of the Chinese urban agglomeration economic circle, many second-tier cities have become The regional economic communities that are linked with each other, some cities make up for shortcomings, and they have become the influx of population while gaining a leading edge in industrial collaboration.” said Guo Yi, deputy general manager and chief analyst of Siyuan Real Estate Market Development. The "Talent Wars" accelerated the inflow of elites and laid the foundation for the demand for property in the property market. "The new round of tightening control started in 2016" at 9.30 "is mainly aimed at first-tier cities with strong investment demand. Although some hot second-tier cities also trigger property market regulation, they are significantly lighter than first-tier cities and are reserved for the property market. A lively opportunity has led to the heavy investment in housing companies."

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