China Affordable Housing Development - NOMURA · 10 Highlights of affordable housing development in 2010: New starts: 5.9mn units Completion: 3.7mn units Stock as of 2010: 16.47mn

China Affordable Housing Development

China Index Academy

June 2011

Contents

Historical development of China affordable housing1

2

Effect on private housing market3

Key issues to be resolved in 20114

Cross-board comparison and suggestions5

Achievements in 2010

3

20.78%

22.69%

20.17%

16.89%

13.49%

9.64%

6.46% 6.02%5.00%

6.12%

3.55% 2.94%

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

单位：万平方米

0%

5%

10%

15%

20%

25%

经济适用房销售面积住宅销售面积占比

China residential and economic housing sales in GFA

(1999-2010)

Source：CREIS, fdc.soufun.com

Economic housing sales Total residential sales EH as % of total residential sales

(10k sqm GFA)

Historical development

4

16.57% 16.37%

14.21%

11.27%

9.16%

6.86%

4.78% 5.10%4.55% 4.32% 4.43%

3.13%

0

5000

10000

15000

20000

25000

30000

35000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

单位：亿元

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

经济适用房投资额住宅投资额占比

Real estate investment on China residential and

economic housing (1999-2010)

Economic housing Total residential EH as % of total residential

(RMB100mn)



5

Y-Y growth in GFA starts and investment of

China affordable housing (1999-2010)

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

经济适用房投资额增长率经济适用房新开工面积增长率


y-y % in real estate investment y-y % in GFA starts


Contents

2

1

3

4

5

Historical development of China affordable housing

Effect on private housing market


Cross-board comparison and suggestions


7

0

500

1000

1500

2000

2500

3000

3500

4000

4500

海南

天津

上海

北京

浙江

江苏

宁夏

甘肃

青海

江西

新疆

黑龙

江

广东

安徽

广西

河南

四川

陕西

辽宁

福建

山西

重庆

湖北

吉林

湖南

河北

内蒙

古

贵州

云南

山东

单位：公顷

0%

20%

40%

60%

80%

100%

120%

140%

Actual land supply for affordable housing in 2010 was 32,400ha, or 25.9% of total residential land supply

Only five provinces and municipalities met the land supply target in 2010

>50% provinces and municipalities achieved <50% of the targets

Actual land supply for affordable housing and

target achievement ratio in 2010


(Hectare)


8

Land supply achievement ratio for affordable housing in 2010

Cities 2007 2008 2009 2010

Shanghai ─ 130% 123% 119.29%

Beijing 60% 18% 31% 106.6%

Guangzhou 7% 18% 60% 163.8%

Shenzhen 54% 28% 58% 228.0%

Tianjin 12% 10% 101% 121.2%

Wuhan ─ 44% 96% 150.6%

Chongqing ─ 85% 37% 35.2%

Hangzhou 41% 12% 84% 138%

Nanjing ─ 10% 56% 112.3%

Suzhou ─ ─ 48% 36%



9

0%

40%

80%

120%

160%

200%

重庆北京苏州成都南京深圳西安天津杭州广州上海武汉


New start achievement ratio for affordable housing in 2010

Chongqing Beijing Suzhou Chengdu Nanjing Shenzhen Xi’an Tianjin Hangzhou Guangzhou Shanghai Wuhan


10

Highlights of affordable housing development in 2010:

New starts: 5.9mn units

Completion: 3.7mn units

Stock as of 2010: 16.47mn units (219mn of urban households X 7.5% of affordable housing coverage)

Stocks in five years: 52.47mn units (30% of total urban housing stocks)

Funding sources for affordable housing development in 2010:

Central gov’t subsidies: RMB76.5bn

Land revenue: RMB46.4bn (3% of net land transfer income)

Housing provident fund: ~RMB5bn

Planned housing provident fund mortgage: ~RMB49.3bn


3

1

2

4

5






Contents

12

231485 590

1000 1000

600 600400

733 826

11691410

1701

2051

2474

2983

31.5%

58.7%

50.5%

70.9%

58.8%

29.3%24.3%

13.4%

0

500

1000

1500

2000

2500

3000

3500

2008 2009 2010 2011E 2012E 2013E 2014E 2015E

单位：万套

0%

20%

40%

60%

80%

保障性安居工程商品住宅保障与市场比例

(10k units)

Affordable housing

Units start in affordable and private housing sectors

(2008-2015F)

Private housing Affordable housing as % private housing

Effect on private housing market:

dual-track housing system in 5 years

Scenario 1: 20.6% pa growth for private housing starts in 2011-15F


13

231485 590

1000 1000

600 600400

826

1169 1169

1487.15

1891.18

2404.99

1169

73331.5%

58.7%50.5%

85.5% 85.5%

40.3%31.7%

16.6%

0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011E 2012E 2013E 2014E 2015E

单位：万套

0%

20%

40%

60%

80%

100%

保障性安居工程商品住宅保障与市场比例Affordable housing Private housing Affordable housing as % private housing

(10k units)

Scenario 2: private housing starts flat y-y in 2011-12F; 27.2% pa growth for 2013-15F



Units start in affordable and private housing sectors

(2008-2015F)


14

Fund and land requirements for affordable housing in 2011-15F

CategoryLand requirement

(k hectares)

Fund requirement

(RMB trn)

Low and public rental housing 60 1.8

Economic and price-capped housing 32.7 1.75

Relocation housing 51.3 1.38

Total 144 4.93




15

CityNew starts

(10k sqm)

New starts

(10k units)City

New starts

(10k sqm)

New starts

(10k units)

Beijing 100 Wuxi 400

Shanghai 100 Hefei 1000

Guangzhou 1000 Zhengzhou 2211.29 29.24

Shenzhen 1616 24 Jinan 550 10

Tianjin 2635 40 Fuzhou 280

Dalian 118 Nanning 11.6

Nanjing 2000 29 Guiyang 500

Suzhou 5 Nanchang 8

Hangzhou 2000 Urumqi 5.8

Xiamen 1.7 Haerbin 13

Wuhan 1000 Shijiazhuang 10

Chengdu 2000 Yinchuan 2

Chongqing 2700 Sanya 202.3 2.96

Xi’an 1598 31.6

Affordable housing development targets (2011-15F)




16

0

10

20

30

40

50

60

70

80

黑龙江

重庆

陕西

江苏

内蒙古

安徽

河南

湖南

吉林

云南

河北

浙江

湖北

四川

辽宁

山东

广东

广西

山西

新疆

福建

贵州

江西

上海

甘肃

北京

天津

青海

海南

宁夏

单位：万套

2011F new start targets for affordable housing

(10k units)




17

0

10

20

30

40

浙江

江苏

安徽

天津

四川

河北

福建

新疆

陕西

山东

辽宁

广东

河南

北京

青海

江西

黑龙江

广西

宁夏

海南

山西

上海

贵州

甘肃

单位：万套

0%

20%

40%

60%

80%

保障房公租房占比

2011F new start targets of affordable housing and

public rental housing’s proportion

(10k units)




18

On the demand side: effects to be seen in 2-3 years

Effect of low rental housing and public housing: in 3-5 years

Effect of public rental housing: in 2-3 years

Price-capped housing and relocation housing: in 3-5 years

On the supply side: effects to be seen after 2013

Effect on the new starts of private housing

Supply of affordable housing will peak at >10mn units in 2013


on both demand and supply sides

19

Supply of affordable and private housing

(2008-2015F)

0

500

1000

1500

2000

2500

3000

3500

2008 2009 2010 2011E 2012E 2013E 2014E 2015E

单位：万套

保障性安居工程开工商品住宅开工（假设方案1）商品住宅开工（假设方案2）商品住宅竣工

(10k units)

Starts of affordable housing


to be seen in 2013

Completion of

private housingStarts of private housing (scenario 1) Starts of private housing (scenario 2)


4

1

2

3

5






Contents

21

Land supply – 41,300ha

Fund requirement– RMB1.4trn

Central government

Land transfer revenue

Housing provident fund

Municipality bonds

Bank loans …

Participants and business model

SOEs

Regional leading developers

Developers with large exposures to suburban areas …

Key issues to be resolved in 2011F

5

1

2

3

4






Contents

23

Thank You!

Documents

China Affordable Housing Development - NOMURA · 10 Highlights of affordable housing development in 2010: New starts: 5.9mn units Completion: 3.7mn units Stock as of 2010: 16.47mn