Source: Colliers International Shanghai (CIS) Research:
MARKET OUTLOOK
Outlook
Residential
High Quality Of ce
Retail
Business Park
Outlook
HIGHLIGHTS
In the f rst nine months of , Hangzhou achieved
steady economic growth led by strong performances
across most major macroeconomic variables and
sectors.
As in other markets across the country, many new
residential projects entered the market during the
third quarter. Since August, transaction volume in
Hangzhous residential market has surged, with aver-
age prices also rebounding strongly.
The high quality of ce leasing market has remained
strong in the traditional CBD areas. With minimal new
supply expected to enter these areas in the near fu-
ture, these buildings should continue to perform well.
On the other hand, Qianjiang New City will account for
the majority of vacant of ce space in the Hangzhou
market for the foreseeable future.
During the third quarter, there were no new major
retail projects entering the market. Retail macroeco-
nomic data remained strong, indicating the sector
should continue to perform well into .CBD
HANGZHOU
colliers/china
HANGZHOU PROPERTY MARKET REVIEW Q3
Source: Hangzhou Statistics Bureau:
HANGZHOU | THIRD QUARTER |
City Macroeconomic Overview
Economic Indicators
Macro Economy
Local Government Revenue Growth% 20.8%
Investment in Fixed
Assets
Y-o-Y Growth of Investment in Fixed Assets% 22.3%
Y-o-Y Growth of Real Estate Development%38.1%
Foreign Direct
Investment
Y-o-Y Growth of Contracted FDI% 32.9%
Y-o-Y Growth of Utilized FDI%
13.8%
Consumption
Y-o-Y Growth of Retail Sales% 20.4%
Q3 ~Q1
20.8%
22.3%
38.1%
32.9%
13.8%
20.4%
P. 2 | COLLIERS INTERNATIONAL
HANGZHOU | THIRD QUARTER |
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1~ Q3
FAI Growth Rate (Y-o-Y) 拘拘拘拘拘拘拘拘拘(拘拘)
Real Estate Investment Growth Rate (Y-o-Y) 拘拘拘拘拘拘拘拘(拘拘)
In the f rst nine months of , Hangzhou achieved steady economic
growth, led by strong performances across most major macroeconomic
variables and sectors. During this period, f xed asset investment rose
22.3% Y-o-Y, to RMB174.31 billion, with real estate f xed investment enjoy-
ing a 38.1% annual growth rate. The local retail market remained strong,
with continued strong double-digit growth, highlighted by total retail sales
reaching RMB156.01 billion, an increase of 20.4% Y-o-Y. The import and
export growth rates declined slightly to 29.8% Y-o-Y, while contracted FDI
and utilized FDI grew Y-o-Y by 32.9% and 13.8%, respectively. This is not
dissimilar to the trend in other major markets, as foreign companies seek
to capitalize on the expected future rise in the RMB as well as the growing
domestic market. Finally, the Shanghai Expo is credited with providing a
boost to the Hangzhou tourism market, with the city receiving 47.15 million
tourists from domestic and overseas sources during the f rst nine months
of . As such, tourism income reached USD1.32 billion.
Residential Property Market
In the third quarter, there was approximately 1,474,400 sq m of new hous-
ing supply added to the market, an increase of 38.82% Y-o-Y. This dra-
matic increase in supply during the period is largely a consequence of the
previous government policy intended to curb property market specula-
tion, which had been announced in April of this year. As a result, many
developers postponed the launch time of their new projects by a few
months, leading to a surge of new residential properties in the quarter.
拘拘
拘拘拘拘拘
1,743.1拘拘拘拘拘22.3拘拘拘
拘38.1拘拘拘拘
1,560.1拘拘拘20.4拘拘拘
29.8%拘, 32.9拘拘拘
13.8拘拘拘拘
拘拘1-9拘拘
拘471.5拘13.2拘
拘1,474,400 拘
38.82%拘 4
拘拘拘拘
拘
Figure 2 Hangzhou Utilized FDI and Contracted FDI
拘 2 拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘
Source: Hangzhou Statistics Bureau
拘拘拘拘拘拘拘拘拘拘
Figure 1 Hangzhou FAI and Real Estate Investment
拘 1 拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘拘
Source: Hangzhou Statistics Bureau
拘拘拘拘拘拘拘拘拘拘
0%
10%
20%
30%
40%
50%
60%
Q1~ Q3
Utilized FDI Growth Rate (Y-o-Y) 拘拘拘拘拘拘拘拘拘(拘拘)
Contracted FDI Growth Rate (Y-o-Y) 拘拘拘拘拘拘拘拘拘(拘拘)
HANGZHOU | THIRD QUARTER |
COLLIERS INTERNATIONAL | P. 3
Aside from the increased market supply, the residential market also
showed signs of strong demand during the quarter after a weak second
quarter. Sales activity increased during July and August with some mid-
range projects of ering temporary sales promotions during the period.
In August, 1,144 units were transacted in Xihu district, almost twice the
July f gures, with the MEGA City, Sincere Garden, and Dream of Butter-
f y developments performing strongest. The total transacted units in the
Xiasha area of Jiangnan district reached 1,053 units during August, with
Poly East Bay, Guanlan Times, Dexin Econdo, and Shimao Riviera Garden
accounting for the majority of sales.
During the traditional September Golden Period, overall transaction vol-
ume increased, with the majority of market activity once again concen-
trated in the Xihu District and Xiasha area of Jianggan districts. In Sep-
tember, residential transacted units reached 5,150 units, a 71% increase
over the previous month. During the month, Wanjia Star City sold 716
units, making it the top selling project by units sold. Another strong per-
former was Riverside City Star, a luxury residential development, which
transacted 298 units at an average price of RMB44,219 per sq m.
In the resale market (f ve prime districts), total sales volume reached 2,367
units in August, a 52.8% M-o-M increase, but a decrease of 40.7% Y-o-Y.
Unit sizes below 60 sq m accounted for 42.2% of total transactions, while
unit prices over RMB18,000 accounted for 70.3% of total market activity.8
1,144
1,053
9,5,150 ,71% 9
590 8 9 716
44,219 298
92,36752.8%
40.7%6099842.2%
18,0001,664
70.3%
High Quality Of ce Market
The high quality of ce leasing market in the traditional CBD areas re-
mained strong, as occupancy levels were stabilized in the majority of
buildings. With minimal new supply expected to enter these areas in the
near future, they should continue to perform well and experience steady
growth in rental levels. On the other hand, Qianjiang New City will con-
tinue to account for the majority of vacant of ce space in the Hangzhou
market, as signif cant new supply continues to enter the market over the
coming 12 months.
CBD
CBDFigure 4 Transacted Units and Average Price of Secondary Residential MarketSource: HZFC365
Figure 3 Supply, Take-up and Average Price of Hangzhou Residential MarketSource: Colliers International Shanghai (CIS) Research:5,000
10,000
15,000
20,000
25,000
30,000200,000
400,000
600,000
800,000
1,000,000
1,200,000
123465781012246810122468911135791113579
New Supply(LHS) ()Take-up(LHS) ()
Average Price (RHS)()
sqmRMB/sqm5,000
10,000
15,000
20,000
25,0001,000
2,000
3,000
4,000
5,000
6,000
1357911135791113579
RMB/sq mUnits
Transacted Unit (LHS )()Average Price (RHS)()
24681012246824681012
P. 4 | COLLIERS INTERNATIONAL
HANGZHOU | THIRD QUARTER |
Although there was little change in the overall leasing market, the of ce
strata-title market has a signif cant pipeline of new projects located in
Qianjiang New City. Some projects, such as UDC, developed by domestic
developer Union Development Group of China, have completely sold out,
while others still have considerable space available for sale. Most of the
projects in this area are developed by loca