China Property Sector: A stable path ahead in 2020


Decent upside expected from China’s property sector on the back of widely anticipated easing policy and good annual results from developers in 2019.
Group Research20 Jan 2020
  • Stability in overall market performance is expected in 2020
  • Most developers have met or exceeded presales targets
  • Small and mid caps to take the lead in 2020
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December ASP saw slight decline from November level with historical high monthly GFA sold. Accordingly, 2019 full year residential sales growth concluded at 10.3% with 1.5% and 8.7% growth in GFA sold and residential ASP respectively. On the supply side full year GFA sold was 10% lower than GFA new start. We expect a stable 2020 ahead with slight decline in GFA sold and slight increase in ASP.

In Dec, the presales figure of 26 listed developers we track was up 19% y-o-y on a weighted average basis. This translates into a full-year presales growth of 22% that exceeds the original averaged targeted growth of 17%. These developers gained 3ppts of market share in 2019 as expected.

Most developers aside either met or exceeded their 2019 presales targets. Looking forward, as small- and mid-caps were more active in the land market in 2019, we believe they will likely record outperforming presales growth this year and take the lead in the ongoing market share consolidation.


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