In recent years, where has China invested the most in real estate development? Where is the growth rate fast?
Generally speaking, the three most important fixed assets are industrial investment, infrastructure investment and real estate development investment. Among them, in terms of real estate development investment, in recent years, with the differentiation of regional property market, the growth rate of real estate development investment in various places has also differentiated.
According to the data of the National Bureau of Statistics, the First Financial Reporter combed the data of real estate development investment in 31 provinces in 2020 and the statistics of the growth rate of real estate development investment since 2011, and found that the top ten provinces of real estate development investment were Guangdong, Jiangsu, Zhejiang, Shandong, Henan, Sichuan, Anhui, Fujian, Hubei and Hunan, and it can be seen that they are mainly economic provinces and populous provinces. From the changes in recent years, Tibet, Guizhou, Gansu, Guangdong, Yunnan, Shaanxi, Henan, Qinghai, Zhejiang and Jiangxi rank in the top ten, and the growth rate of real estate development investment is mainly related to population flow, urbanization rate and economic development speed.
Table: Investment in real estate development in 31 provinces in 2020 (data source: National Bureau of Statistics)
Ten provinces with the largest investment in real estate development in 2020: Guangdong, Jiangsu and Zhejiang, exceeding one trillion.
The data shows that in 2020, investment in real estate development in three provinces exceeded the trillion mark, namely Guangdong (1,731.3 billion yuan), Jiangsu (1,317.1 billion yuan) and Zhejiang (1,141.4 billion yuan).
According to statistics from Guangdong Provincial Bureau of Statistics, in 2020, the investment in real estate development in Guangdong was 1.73 trillion yuan, a year-on-year increase of 9.2%. In the same period, the sales area of commercial housing in Guangdong increased by 7.7% year-on-year, an increase of 8.6 percentage points over the previous three quarters, the highest growth rate since 2018.
In 2020, the investment in real estate development in Guangdong is more than 400 billion yuan than that in Jiangsu. Judging from the data changes in the past decade, from 2011 to 2014, Guangdong’s investment in real estate development has been less than that of Jiangsu, but after Guangdong overtook Jiangsu in 2015, its leading edge continued to expand.
Table: Investment in real estate development in the four major economic provinces along the eastern coast from 2011 to 2020 (unit: 100 million yuan). Source: National Bureau of Statistics)
Among them, the growth of real estate demand brought by population growth is the biggest key. According to the population data of Qipu, the population of Guangdong has increased by 21.709 million in the past ten years. It accounts for 30% of the national increase. The increase in Guangdong is almost equal to the total increase in Zhejiang, Jiangsu and Shandong provinces. In the same period, the increase in Jiangsu was 6.088 million, only 28% of that in Guangdong.
Peng Peng, executive chairman of Guangdong Provincial System Reform Research Association, analyzed the First Financial Report. The investment in real estate development is closely related to population changes. In particular, land indicators are now linked to population. In recent years, the population growth rate of Guangdong is much faster than that of Jiangsu. The annual increase is equivalent to an increase in the population of a medium-sized city, and a medium-sized city has a great demand for real estate.
Zhang Bo, Dean of the Branch of Anjuke Real Estate Research Institute, analyzed the First Financial Report, and found that Guangdong’s real estate development is also an important embodiment of Greater Bay Area’s development. Guangzhou and Shenzhen, two first-tier cities in Guangdong, are increasingly attractive to the population. Under the good development trend of Greater Bay Area, the investment in real estate development has also increased rapidly. At the same time, the cities in Guangdong are also strongly linked, such as the integration of Guangzhou and Buddhism and the coordinated development of Shenzhen, Guangzhou and Huizhou, which have formed obvious synergistic effects.
Photo: Guanggang New Town, Liwan District, Guangzhou (Lin Xiaozhao/photo)
Zhang Bo said that on the whole, Guangdong’s future economic development and population inflow will form a good support for real estate development and drive real estate development investment to remain at a certain high level for a long time.
Similar to Guangdong, Zhejiang, the fourth largest economic province, ranks eighth in the country in terms of total resident population, which is more than 36 million less than Shandong, the third largest economic province. However, on the one hand, due to Zhejiang’s developed economy, its per capita income ranks third in the country, second only to Shanghai and Beijing, with stronger purchasing power and higher overall housing prices. On the other hand, the population of Zhejiang has increased by 10.14 million in the past decade, which is 77% higher than that of Shandong in the same period.
Zhang Bo analysis, the more the demand for housing in a region, the greater the total real estate open investment. Zhejiang has a large number of migrants, such as Hangzhou, with a large net inflow of population. In this way, developers are also willing to invest in these places.
The data shows that the number of floating population in Zhejiang has reached 25.5575 million, ranking second in the country after Guangdong. Among them, the inflow population outside the province is 16.1865 million, and the floating population in the province is 9.371 million. In the past ten years, the floating population in the province has increased by 69.3881 million, with an increase rate of 37.27%. According to the analysis of Zhejiang Provincial Bureau of Statistics, this shows that the accelerated transfer of rural labor force and rapid economic development have promoted a large number of floating population, especially Zhejiang, as a developed coastal province, has attracted a large number of people from other provinces to work, start businesses and live in Zhejiang.
After the four major economic provinces in the east coast, Henan, the province with the largest registered population and the largest economic province in the central and western regions, ranks fifth in real estate development investment, and Sichuan, the most populous province in the west, ranks sixth. Anhui, a populous province in central China, ranks seventh. Fujian, Hubei and Hunan rank 8 to 10 respectively.
It is worth noting that among the top ten provinces with total investment in real estate development, the permanent population of Guangdong and Shandong is over 100 million, that of Henan is close to 100 million, that of Jiangsu and Sichuan is over 80 million, that of Zhejiang, Anhui and Hunan is over 60 million, and that of Hubei is 57.75 million. That is to say, among the top ten provinces, 9 provinces are populous. Only Fujian has a population of less than 50 million. According to Qipu data, the population of Fujian will be 41.54 million in 2020, ranking 15th in China.
The high investment in real estate development in Fujian is related to the large population inflow and rapid growth in Fujian. The data shows that the population of Fujian has increased by 4.646 million in the past ten years, ranking sixth in the country. On the other hand, the overall housing price level in Fujian is also relatively high. For example, Xiamen’s housing price ranks fourth in the national cities, surpassing Guangzhou and Hangzhou. Fuzhou’s housing price level also ranks 11th among cities in China. The high level of housing prices has also boosted investment.
Table: Population changes in 31 provinces in the past ten years (data source: National Bureau of Statistics)
Growth rate in recent ten years: many provinces in the west have experienced rapid growth.
In terms of the growth rate of real estate development investment in various provinces since 2011, Tibet, Guizhou, Gansu, Guangdong, Yunnan, Shaanxi, Henan, Qinghai, Zhejiang and Jiangxi rank in the top ten. Among them, except for Guangdong and Zhejiang, two coastal provinces, where the demand increased and the real estate investment increased rapidly due to the inflow of a large number of migrants, the other eight provinces all came from the central and western regions, including two in the middle and six in the west.
Table: Growth rate of investment in real estate development since 2011 (Source: First Financial Reporter compiled according to the data of the National Bureau of Statistics)
On the one hand, the rapid growth of western provinces is related to the late start of real estate development in these places and the small base. For example, Tibet invested 513 million yuan in real estate development in 2011. In the case of a small base, the speed of urbanization is relatively fast, which brings rapid growth of real estate investment.
Among them, the biggest increase in urbanization is from Guizhou in the southwest. Compared with the results of the Sixth General Plan in 2010, the urban population in Guizhou Province increased by 8,748,200 in the past decade, and the urbanization rate increased by 19.34 percentage points, ranking first in the country, and the increase rate was 9.49 percentage points higher than that in the previous decade (2000-2010). In the past decade, the urbanization rate of Guizhou has increased by 5.13 percentage points higher than that of the whole country, and the gap between the urbanization level of Guizhou and the whole country has further narrowed.
According to the analysis of Guizhou Provincial Bureau of Statistics, the rapid increase of urbanization rate in Guizhou Province mainly benefits from three aspects: First, the overall victory in tackling poverty, especially the remarkable effect of ex situ poverty alleviation and relocation, has laid a solid foundation for accelerating the urbanization process in Guizhou Province. Second, the rapid economic development, the continuous expansion of urban areas and the continuous enhancement of urban population carrying capacity have provided a steady stream of endogenous power for accelerating the urbanization process; Third, the reform of the household registration system has been deepened, especially the implementation of the policy of migrant workers settling in cities, which has effectively promoted the population to gather in cities.
The urbanization rate in Gansu, Henan and other provinces has also increased significantly. Especially in Henan, the province with the largest registered population in the central region, the urban population has increased greatly. According to the seventh census data, in 2020, the population living in cities and towns in Henan was 55.079 million, accounting for 55.43% of the province’s permanent population (that is, the urbanization rate); Compared with the sixth national census in 2010, the urban population in the province increased by 18.859 million, and the proportion of urban population increased by 16.91 percentage points. Rapid urbanization has also brought great opportunities for the development of the real estate market.
In contrast, there are three provinces with negative growth in real estate development investment, namely Liaoning, Inner Mongolia and Heilongjiang. In addition, Jilin’s real estate development investment growth rate ranks fourth from the bottom.
The decline in investment in real estate development in Northeast China is related to the economic downturn since 2013, the reduction of employment opportunities and the flow of young people to the southeast coast. In 2020, the total population of the three northeastern provinces will decrease by 11.01 million compared with ten years ago. Because the outflow is mainly young people or elderly people with strong purchasing power, the demand of the property market has also been greatly affected.
Zhang Bo analyzed that with the continuous development of key urban agglomerations in recent years, a large number of people began to gather in the five major urban agglomerations, which also led to some cities in the north being in a state of population outflow. The lack of growth in demand for housing led to a continuous decline in the willingness of housing enterprises to take land.
On the other hand, it is also related to the stage of development. Yi Baozhong, a professor at the Northeast Asia Research Institute of Jilin University, analyzed that the industrialization and urbanization in Northeast China were early. In the planned economy period before the reform and opening up, the degree of urban development in Northeast China was better than that in the southeast coast. At that time, there were many heavy industries and industrial workers in these big cities, so the cities were larger.
Judging from the speed of development, in recent years, even the four sub-provincial cities in Northeast China, their urban population scale expansion is not very fast, and the new demand is less. In addition, in the past planned economy era, enterprises ran the society, and many state-owned enterprises built houses for workers, so there were many non-commercial houses in these cities, so the housing stock would be more than that in other regions.