China’s real estate market is expected to grow at a steady pace after the high-speed development of recent years, according to industry data.
China Real Estate Information Corp (CRIC), an online industrial information provider, said 10 Chinese mainland real estate companies’ sales exceeded 200 billion yuan ($29.8 billion) in 2018, with Country Garden, a Hong Konglisted property developer, topping the list at 728.7 billion yuan, while Vanke and Evergrande Group, also a Hong Kong-listed company, followed with 607 billion yuan and 551.1 billion yuan respectively.
The report pointed out that 30 companies had achieved annual revenue of 100 billion yuan, and the total sales of the top 100 real estate developers grew by 35 percent year-on-year.
CRIC predicted that the industry will enter a period of stable growth, with the top 100 companies’ annual growth rate ranging from 20 to 30 percent, compared to an average of 40 percent in 2017.
China Real Estate Index System, another industrial information provider, also released a similar report, which revealed that the companies with revenue ranging from 10 billion to 100 billion yuan have been more rational in land purchases and have gradually switched their focus from first and second-tier cities to smaller ones.
“The top real estate developers will slow down,” said Zhang Dawei, chief analyst of Centaline Property, adding that second-tier companies were becoming the major force in land purchases.
He said despite the pressure from tighter housing regulations, 2018 had seen booming sales, with 90 percent of the companies reaching their annual goal.
The market was not cold despite a relatively lower growth rate, said Xie Yifeng, a real estate columnist and commentator.
CRIC also predicted that amid an industrial slowdown, real estate developers will seek to diversify their business to maintain growth, but will continue to rely heavily on real estate in the year ahead.
However, Zhang said although many housing companies have been promoting other business such as tourism, elderly care, education and long-term rental property, their most profitable sector remains real estate.
“The common problem everybody faces is there is no other obviously profitable business,” he added.