JLL’s China April Property Market Monitor is Sobering

Sunday, May 3, 2009 1:48

For those looking for good news on China’s property market, I am not sure if the recent JLL Property Market Monitor will be the document you were hoping for, but Steven McCrord’s Page 1 was sobering for me:

Total prime retail stock in 21 major Chinese cities will grow at a CAGR of 20.2% through the next three years, while retail sales are only projected to grow at 9.2%. The divergence between stock growth and retail sales growth will drive up the national vacancy rate from 7.2% at end 2008 to a projected 13.9% at the end of 2011.

A projection that has plenty of support in the 3 page document that highlights problems in the residential, commercial, and retail sectors (the one bright spot was reserved for infrastructure).

Download the full report here

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One Response to “JLL’s China April Property Market Monitor is Sobering”

  1. Zhou Ji-Ming says:

    June 5th, 2009 at 11:45 pm

    I do not care what all the haters say. Here’s what I know:

    I was interested in a property on Suzhou Creek near Zhong Tan Lu. Today was the first day units went on sale and I wanted to get a penthouse, so I showed up at 9 a.m. when the sales office opened.

    First, it was a total mob scene which tells me that market sentiment in this neighborhood especially is quite strong right now. We haven’t’ seen mob-scene in the sales office since back in about ’03 or ’04.

    Second, the sales office was able to raise the price of the units between 9 a.m. and 2 p.m.. This is typically the result of them having locked-in a certain number of sales in the morning session….maybe 100 units or so, which is a strong volume for a morning. Some buyers had pre-purchased VIP cards from the developer for RMB 200k and they were taken to the head of the line…..the very long line approx 150 people deep.

    The initial asking range was 23K-25K and the price went up from there to 26-29K after around 2 p.m.

    By 1 p.m. the sales officers had worked through the initial 150 numbers given out to the non-VIP buyers…..and they announced a planned release of 150 numbers at 3 p.m.

    As I posted previously, location is the key in real estate and this project is well located and with river views…albeit facing north. The combination of these factors tells me that market sentiment for new properties in downtown SH is clearly picking up somewhat.