(Yicai Global) March 2 — Boosted by a number of favorable policies, Wuhan, the capital of China’s central Hubei province, sold 12,421 newly built apartment units in February, hitting a 17-year high for monthly sales, according to the latest local government data.
The figure was 87.2 percent higher than January and 108.5 percent up on February last year.
The market recovery is showing up in the sales offices of residential property projects across Wuhan. After the Chinese New Year holiday, the number of potential buyers visiting sales offices in the city increased by one to three times compared with before the break. In fact, the Wanhe Jingjie project located in the Optics Valley development zone sold out on opening day, with projects in other parts of the city selling fast.
As the number of transactions has risen, some projects have begun to withdraw promotional offers, and notices like ‘Discounts to be cancelled; prices to increase soon” can been seen in many sales offices across Wuhan.
Wuhan government data also showed that the average price of new homes in February was CNY16,210 (USD2,349) per square meter, up 0.45 percent from January. It marked a four month of gains after 11 consecutive months of decline. The current average price is already higher than that in 2019.
But Li Guozheng, director of the Market Research Center of the China Index Academy (Central China), sounded a note of caution about February’s high-growth data. He told Yicai Global that since the lunar new year holiday fell in February in 2022 and the January this year, the comparative bases were both relatively low.
In fact, the recovery in Wuhan’s real estate market is not borne out by most projects, Li pointed out, saying that only projects in the main urban area or some cost-effective projects have been popular, leading to a significant rise in transactions in February. For example, the number of new builds in the main urban area accounted for 64 percent of all transactions.
However, the market in most new urban areas is still not hot enough, with certain projects having been in market for more than 20 months in some districts, so destocking is still hard, he noted.
Wuhan’s residents also still regard the ‘safety’ of funds as a key decision-making factor when choosing projects, so most of the hot-selling projects are mainly real estate developed by major state-owned developers or listed builders with a stable financial status, with the sales of projects developed by firms with a history of financial troubles still quite low, Li noted.
So although the city’s property market rebounded well in February, the support of more favorable policies is still a must in the short-term if the property market continues to pick up, he said.
Editors: Tang Shihua, Peter Thomas
(Yicai Global) Feb. 9 — Chinese insurance companies have begun to actively participate in the country’s property market since the real estate policy environment improved, investing a total of CNY60.9 billion (USD9 billion) in seven projects this year to date.
By the same point last year, they had invested only CNY5.3 billion (USD784 million) in three deals.
Most of the new projects are in Shanghai and Beijing, with others in Hangzhou, Chengdu, and Ningbo, according to information disclosed by the Insurance Association of China.
Real estate is an important investment direction for insurers, which are always interested in properties that offer stable rental incomes, such as commercial office space, industrial parks, and logistics warehouses, according to investment managers at large insurance firms.
Ping An Life Insurance was the biggest spender in January. The Shenzhen-based frm announced it had made five investments of about CNY55.8 billion in commercial real estate projects in Shanghai, Beijing, Hangzhou, and other cities.
AIA Life Insurance invested in the 89th Street project on the North Bund in Shanghai and Taikang Life Insurance in a retirement community project in Beijing.
Editors: Tang Shihua, Futura Costaglione
(Yicai Global) Nov. 10 — A turning point is appearing in China’s commercial vehicle market, according to Fan Xianjun, chief executive of Farizon Auto, a new energy commercial vehicle business subsidiary of Chinese private auto giant Zhejiang Geely Holding Group.
Sales of traditional fuel-commercial cars are falling, while that of new energy- commercial vehicles are rising, forming a strong contrast, he said recently.
Fan pointed out that before 2018, China’s new energy commercial vehicle market was basically driven by policy, but this year’s situation is completely different, with market power slowly increasing.
It is expected that after 2023, new energy commercial vehicles will enter a market-driven stage supplemented by policy. And after 2025, it will be fully driven by market forces, he predicted.
Domestic new energy commercial vehicle posted a market penetration rate of 11.8 percent in September, topping the 11 percent mark for the first time, as 33,000 such vehicles were sold in a year-on-year surge of 95.9 percent, data from the China New Energy Commercial Vehicle Association showed.
In the January-September period, sales of new energy commercial vehicles reached 204,000 units, climbing 80.1 percent, with a market penetration rate of 8.2 percent.
The NEV market penetration rate was 4.2 percent last year and only 2.7 percent in 2020, per data from the same association.
Citing industry forecast data, Fan noted that by 2030, the penetration rate of new energy light trucks will reach more than 30 percent, and the penetration rate of new energy medium- and heavy-load trucks will also be above 25 percent.
Compared with the current market penetration, the future growth space of new energy commercial vehicles is still quite large, he added.
On the other hand, the rapid growth of the new energy commercial vehicle market has been achieved against the background of a significant contraction in the overall domestic commercial vehicle market.
According to data from the China Association of Automobile Manufacturers, in the first nine months this year, the cumulative sales of commercial vehicles reached 2.5 million units, down 34.2 percent annually.
Farizon Auto’s business has expanded simultaneously with the rapid growth of new energy commercial vehicles in China. Founded in 2016, the firm enjoyed a 169.7 percent annual increase in new energy commercial vehicle sales over the first nine months, with its new energy light trucks snaring a market share of 24.2 percent.
At the end of October, Farizon Auto completed the Pre-A round of financing worth more than USD300 million, and plans to carry out Series A funding soon.
Editors: Tang Shihua, Peter Thomas