Statistics of movement of commercial residence selling prices as of April 2020 in 70 major and mid-sized cities (source: State Statistics Bureau):

For first-hand commercial residences in Shenzhen, the area available for sale is 2,128,120.79m², and the selling cycle is 7 months, indicating supply shortage. For first-hand commercial properties, the area available for sale is 1,436,385.31m², and the selling cycle is 21.7 months. For first-hand office buildings, the area available for sale is 1571065.59m², and the selling cycle is 51.2 months, which continues to rise. Office buildings face very high selling pressure.

Land Market

In May 2020, 6 plots of land were transacted citywide. The most notable deal is about a plot of Cat. II residential land (T102-0346) in Qianhai area. Through 89 rounds of bidding, the land plot goes to Longguang Real Estate Company for ¥11.597b on the condition of building and handover of 40760m² free talent housing areas for renting only, with floor price at ¥63,000/㎡. In spite of the harsh auction condition, commercial properties on the land plot are subject to not only average selling price limit (¥107,000/㎡), but also quota of units with indoor floor area of less than 90m² (no less than 70%). Currently, new and upmarket residences sell better. But nearly 16 real estate enterprises, including 3 heavyweight consortiums, tendered bid for the plot of land. The consortiums include consortium of Gemdale + PowerChina + China Resoruces Corporation (CRC), consortium of Shimao + Kaisa, and consortium of Tianjian + Shenye + Qianhai Holdings. The rarity is apparent. Firstly, it marked the third time for Qianhai to put residential land for auction since its formation in 2013. Excluding a scrapped land auction in 2019, in the strict sense, it was the second ever residential land auction in the history of Qianhai. Secondly, the plot of land is the first plot of residential land in Qianwan, which is mainly positioned as a versatile development area including production service base focusing on technology and information service and accommodating functions extended from Guiwan area and Mawan area, and a cluster of sports, education and medical facilities. The amenities will improve according to plan. Lastly, excluding the Shenshan area, the 5 plots of residential land sold this year in Shenzhen are all for talent housing. The aforesaid plot of land is arguably the first market-based deal of residential land this year in Shenzhen. If scrapping of the Qianhai residential land plot auction last year was meant to avoid land king, in consideration of the upbeat land market in Beijing, Shanghai and Guangzhou, transaction of the Qianhai residential land plot is no surprise at all. But recently, there is a sign that housing speculation is brewing in Shenzhen. Residential land auctions should come more from Guangming and Longhua. See the table below for details of land plot transactions:

Housing Market

1. Presale of new construction houses

In May 2020, totally 3 projects citywide obtained presale permit. The number of presale apartments was 2,046, an increase of 387.1% month on month or a decrease of 45.7% year on year. The area of presale residential properties was 225,379.5m², an increase of 485.4% month on month or a decrease of 41.5% year on year.

2. First-hand housing market

In May 2020, 3,143 first-hand commercial residential properties were transacted citywide, a month-on-month decrease of 8.8% or a year-on-year decrease of 31.7%. The transacted area was 301,064.89m², a month-on-month decrease 8.0%, or a year-on-year decrease of 31.9%. The average strike price was ¥53,641/m², a month-on-month increase of 0.24% or a year-on-year increase of 4.2%. For details, see the table below:

The first-hand residential properties transacted in May 2020 are mainly for meeting of rigid demand and improvement of living condition. Among the transactions, properties of less than 90m² in floor area accounted for 46% (flat with the previous month), properties of 90 - 144m² in floor area stayed flat (declined from 52% to 51%).  See the figure below for transaction trend of first-hand commercial residences by district:

3. Second-hand housing market

In May 2020, 8,553 second-hand residential properties were transacted citywide, a month-on-month increase of 11.4% or a year-on-year increase of 16.2%. The transacted area was 707,480.5m², a month-on-month increase of 7.3% or a year-on-year increase 16.7%.

See the figure below for transaction trend of second-hand houses by district:

Commercial Market

1. New construction house presale

In May 2020, totally 6 projects citywide obtained presale permit for commerce (including commercial apartments). 1,389 commercial units were presold, a year-on-year decrease of 33.3%. The presale commercial area was 135,868.79m², a year-on-year increase of 2.5%.

2. First-hand commercial market

In May 2020, 1,035 first-hand commercial properties were transacted citywide, a month-on-month increase of 14.7% or a year-on-year decrease 3.6%. The transacted area was 53,207.89m², a month-on-month increase of 20.6% or a year-on-year decrease of 28.9%. The average strike price was ¥53,424/m², a month-on-month increase 4.5%. See the figure below for transaction trend of first-hand commercial properties by district:

3. Second-hand commercial market

In May 2020, 251 second-hand commercial properties were transacted citywide, a month-on-month decrease of 14.0% and year-on-year decrease of 32.7%. The transacted area was 15,798.49m², a month-on-month decrease of 33.8% and a year-on-year decrease of 32.3%. See the figure below for transaction trend of second-hand commercial properties by district:

Office Market

1. New construction house presale

In May 2020, 1 project obtained office presale permit in Shenzhen. The number of presale office units was 356, a year-on-year decrease of 39.8%. The presale office area was 58,680.33m², a year-on-year decrease of 38.7%.

2. First-hand office market

In May 2020, 275 first-hand office units were transacted citywide, with a month-on-month increase 22.2% or a year-on-year decrease of 42.7%. The transacted area was 16,364.63m², a month-on-month increase of 7.4% and year-on-year decrease of 54.7%. The average strike price was ¥42,923/m², a month-on-month increase of 0.06% or a year-on-year decrease of 32.4%.

3. Second-hand office market

In May 2020, 76 second-hand office units were transacted citywide, a month-on-month decrease of 17.4% or a year-on-year decrease of 37.7%. The transacted area was 8,505.83m², a month-on-month decrease of 48.7% or a year-on-year decrease of 36.8%. See the figure below for transaction trend of second-hand office units by district:

Summary

In May 2020, transaction of second-hand residential properties continues to grow. In the light of the selling cycle, sign of supply shortage of residential properties is apparent. According to forecast given by the municipal Bureau of Housing and Urban-Rural Development, 109 projects are slated for property sale in the second half of the year, involving 4,905,500㎡ for residential properties and 1,113,300㎡ for commercial apartments. In January to May, the approved presale area was 520,000㎡ for residential properties and 52,200㎡ for commercial apartments. Currently, there are 33,727 residential properties in stock and 16,707 commercial apartments in stock. According to statistics from Shenzhen Urban Planning, Land & Resources Commission, the transaction trend of first-hand and second-hand properties by year is as follows: