URBAN VIEW -1-
Contents:
2017 Issue No. 3
02 Data & Views
Macro Economy
Urban Data - Shanghai Inventory
Residential Price Index
Urban Analysis - Real Estate Market
Costs of Building Materials &
Construction
23 Industry Focus
Targeted Increase of Loan Rate Begins
27 In-Depth Observation
Study On Quantitative Analysis of The
Ecological Benefits from Land
Reclamation in Suburbs of Metropolis
39 News Guidance
Policy & Regulation
Real Estate Finance
Market Highlights
Hosted by: Urban Surveyors -
Shanghai Urban Real Estate
Appraisal Co., Ltd. (SUREA)
Chief Editors: Yuan Donghua,
Wang Changhua
Deputy Editors-in-Chief: He Jian,
Zhu Yu
Executive Editor: Qin Yun
Associate Editors: Shao Minghao,
Huang Haisheng, Jiang Qimin, Lin
Feng
Editors: Lin Jingjun, Ren
Chenying, Shi Jian, Mi Huiying
Art Editor: Zhang Tao
Address: 11F & 15-18F New
Golden Bridge Plaza, No. 1 West
Beijing Road, Shanghai
Postcode: 200003
Website: www.surea.com
Email: [email protected]
Tel: 86 21 63589988
URBAN VIEW URBAN VIEW -2-
Macro Economy
Trend of
Growth of Shanghai
CPI (Apr)
Category YoY
CPI
Food, tobacco and liquor
Clothing
Residence
Living articles and services
Transportation and
communication
Education, culture and
recreation
Health care
Other articles and services
URBAN VIEW
Trend of CPI & PPI, Jan 2015~Apr 2017
Shanghai Real Estate Loans, Jan 2015~Mar 2017
YoY % MoM %
0.1 1.2
-1.8 -0.3
1.3 0.2
2.4 0.1
0.8 0.2
1.8 -0.2
2.6 0.4
5.7 0.7
3.4 0.7
PPI (Apr)
Category YoY
PPI -0.4
Means of production -0.6
Mining industry -1.2
Material industry -0.8
Process industry -0.4
Means of livelihood -0.1
Food -0.2
Clothing 0.0
General articles for daily
use
-0.1
Durable consumer goods 0.1
URBAN VIEW -3-
7
YoY % MoM %
0.4 6.4
0.6 8.4
1.2 28.3
0.8 13.0
0.4 5.2
0.1 0.7
0.2 0.5
0.0 1.5
0.1 1.4
0.1 -0.1
URBAN VIEW -4-
Urban Data
- Shanghai Inventory Residential Price Index
1. The large transaction volume drove the index up. Credit and loan policies
may be further tightened.
The significant rebound of
transaction volume greatly
encouraged the landlords,
which drove the index up by
2.08%.
At the beginning of May,
many banks of Beijing have promulgated new requirement for the loan rate of home
mortgage. And some banks have already reduced the concession of loan rate for first
home buyers. With the rebound of the transaction volume of inventory homes, further
tightening of the credit and loan policy in Shanghai cannot be ruled out if the
government tries to stabilize the home price.
Shanghai Inventory Residential Price Index was 308.87 in April 2017, rising by 2.08% MoM and growing by 36.78% YoY.
The city’s index increase over the past three months
Month Index MoM Increase
2017. 2 297.07 1.66%
2017. 3 302.57 1.85%
2017. 4 308.87 2.08%
URBAN VIEW -5-
2. Price index beyond the Suburban Ring Road saw consecutive growth, and
price index within the Inner Ring Road saw the smallest increase.
The price index beyond
the Suburban Ring
Road saw an increase
of 3.36%, and the price
index within the Inner
Ring Road saw a
growth of 1.59%.
3. Exurban sections saw further increase and Chongming Section saw the
largest growth.
In April 2017, most exurban sections saw further increase in price index; Chongming
Section saw an increase of 5.30%, the largest one in this month.
Between OR and SR313.43 2.11%
Within IR 300.66 1.59%
Between IR and MR 319.21 1.88%
Between MR and OR 320.26 1.96%
Outside SR 269.92 3.36%
URBAN VIEW -6-
Urban Analysis——Land Market
1. Supply
1) Overall Supply
The supply volume of business-oriented land showed structural decline in April.
There were only 22.2 hectares supplied, down 51.22% MoM. By contrast, there were
15.5 hectares of industrial land listed, creating a record high since the beginning of the
year.
2) Supply of Business-oriented Land by Type
By type, only retail/office land and affordable housing land were listed on market in
April. There were 17.3 hectares of retail/office land supplied and merely 4.9 hectares
of affordable housing land supplied.
0
20
40
60
80
100
120
140
160
180
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04ha.
Trend of Land Supply
Business-oriented land Industrial land
0
20
40
60
80
100
120
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04ha.
Supply of Business-oriented Land by Type
Commodity residential land Retail/office land
Affordable housing land Mixed-use land (incl. residential use)
URBAN VIEW -7-
2. Transaction Volume
1) Overall Transaction Volume
The overall shrinkage of supply led to the decline of transaction of business-oriented
land in April. Only 17.3 hectares were traded, down 32.4% MoM. The transaction
volume of industrial land rebounded to 16.2 hectares in April, seeing significant
increase on both monthly basis and yearly basis.
2) Transaction Volume of Business-oriented Land by Type
By type, only retail/office land was transacted in April. The transaction area totaled
17.3 hectares, including 3 parcels located in Pudong, Xuhui and Qingpu, respectively.
0
20
40
60
80
100
120
140
160
180
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04ha.
Trend of Land Transaction Volume
Business-oriented land Industrial land
0
10
20
30
40
50
60
70
80
90
100
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04ha.
Transaction Volume of Business-oriented Land by Type
Commodity residential land Retail/office land
Affordable housing land Mixed-use land (incl. residential use)
URBAN VIEW -8-
3. Transaction Price
In April 2017, the average transaction price of business-oriented land increased to
RMB 17409/sqm, down 39.8% MoM. The average transaction price of industrial land
saw a further decrease to RMB 1082/sqm without the support of parcels in central
areas and parcels for R&D and design purpose.
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04RMB/sqm
Average Transaction Price of Business-oriented Land
Business-oriented land Commodity residential land
Retail/office land Mixed-use land (incl. residential use)
0
500
1000
1500
2000
2500
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04RMB/sqm
Average Transaction Price of Industrial Land
Industrial land
URBAN VIEW -9-
Urban Analysis——New Residential Market
1. Supply and Demand, Transaction Volume and Price
In April 2017, the city’s new commodity residential supply totaled 560900 sqm, a
MoM growth of 42.98% and a YoY decrease of 57.25%; the transaction area totaled
671900 sqm, down 9.44% MoM and 30.85% YoY. The supply-demand ratio
rebounded to 0.83. The transaction prices averaged RMB 47,682/sqm, dropping by
0.69% MoM and rising by 45.71% YoY.
0.00
50.00
100.00
150.00
200.00
250.00
16-4 16-5 16-6 16-7 16-8 16-9 16-10 16-11 16-12 17-1 17-2 17-3 17-4
sqmMonthly Supply & Demand for Commodity Housing
Supply area Transaction area
x 1
00
00
-15.00
-5.00
5.00
15.00
25.00
35.00
45.00
55.00
20,000
25,000
30,000
35,000
40,000
45,000
50,000
16-4 16-5 16-6 16-7 16-8 16-9 16-10 16-11 16-12 17-1 17-2 17-3 17-4
%RMB/sqm Average Transaction Price of Commodity Housing
MoM YoY Average transaction price
URBAN VIEW -10-
2. Hot Sections
Top 10 sections in terms of commodity residential transaction volume across the city in April 2017
Rank Section Supply Area
(sqm)
Transaction
Area
(sqm)
Average Transaction
Price
(RMB/sqm)
Turnover
(in RMB 100
million)
1 Lingang New Town 60,700 51,049 25,034 12.78
2 Sijing - 45,902 47,851 21.96
3 Jiading New Town 23,429 38,950 36,089 14.06
4 Huinan - 30,605 30,169 9.23
5 Haiwan 31,588 29,933 18,861 5.65
6 Nanxiang 37,560 26,765 50,674 13.56
7 Gaoqiao, Gaohang 34,654 24,106 54,963 13.25
8 Qilian 44,894 23,617 51,519 12.17
9 Xujing - 22,776 57,027 12.99
10 Zhaoxiang 33,300 21,064 44,642 9.40
Top 10 projects in terms of commodity residential transaction volume across the city in April 2017
Rank Project Name District Section
Transaction
Area
(sqm)
Average
Transaction
Price
(RMB/sqm)
1 Lush Land Songjiang Sijing 27,659 53,726
2 Greentown Sincere Garden Fengxian Haiwan 25,628 18,015
3 Sunland Residence Pudong Gaoqiao, Gaohang 23,018 55,489
4 Shanghai Western Center Jiading Nanxiang 22,915 50,659
5 Godsend Villa Jiading Jiading New Town 20,584 35,219
6 Capitaland New Horizon Nanhui Lingang New Town 18,193 19,977
7 La Mirage Nanhui Huinan 14,854 26,878
8 Wonderful World Town Pudong Huamu, Beicai 13,603 67,333
9 Greenland Nine Warm Home Songjiang Sijing 11,116 42,007
10 Ocean Seasons Nanhui Huinan 11,105 33,330
URBAN VIEW -11-
3. Hot New Supply
Top 10 projects in terms of new commodity residential supply across the city in April 2017
Rank Project Name District Section
New Supply
Area
(sqm)
1 Residence Elite Baoshan Qilian 44,894
2 Rui Hong Xin Cheng Hongkou Sichuan Rd. (N.), Siping Rd. 44,496
3 Yanlord on The Park Pudong Century Park 43,216
4 Shanghai Western Center Jiading Nanxiang 37,560
5 Central Garden Putuo Yichuan 35,878
6 Sunland Residence Pudong Gaoqiao, Gaohang 34,654
7 Splendid Villa Qingpu Zhaoxiang 33,300
8 Tagen Garden Nanhui Lingang New Town 32,537
9 Greentown Sincere Garden Fengxian Haiwan 31,588
10 Zhonghuan International City Baoshan Gongfu, Gongkang 31,532
4. Transaction Structure
By total price, in April, the proportions of properties priced RMB 2-3 million fell by
6.08 percentage points; while the proportions of properties priced over RMB 3 million
below 1m0%
100~1501% 150~200
7%
200~30018%
300~40018%
400~50016%
above 5m40%
Transaction Structure of Commodity Housing by Total Price, Apr 2017
below 704%
70-9023%
90-14557%
145-2008%
200-3006%
above 3002%
Transaction Structure of Commodity Housing by Area, Apr 2017
below 1m0%
100~1501% 150~200
4%200~300
24%
300~40018%
400~50014%
above 5m39%
Transaction Structure of Commodity Housing by Total Price, Mar 2017
below 706%
70-9024%
90-14556%
145-2007%
200-3005%
above 3002%
Transaction Structure of Commodity Housing by Area, Mar 2017
m = million
URBAN VIEW -12-
increased.
By area, the proportions of properties larger than 90 sqm rose across the board. The
proportion of properties with an area of 90-145 sqm saw the largest growth, namely,
1.74 percentage points. By contrast, the proportions of properties smaller than 90 sqm
declined by 2.59 percentage points in total.
5. Inventory Change
As of end-April 2017, the city’s first-hand residential inventories totaled 41,168 units,
up 445 units MoM. Although the listing volume of new commodity housing
significantly rebounded in the past two months, the supply still largely fell short of the
demand. The digesting period of inventory housing was around 4 months.
30000
40000
50000
60000
70000
80000
90000
100000
Apr Aug Dec Apr August Dec Apr
UnitsChange of Shanghai Residential Inventory, Apr 2015~Apr 2017
URBAN VIEW -13-
Urban Analysis——Second-hand Residential Market
1. Transaction Volume and Price
In April, the city’s second-hand residential transaction volume totaled 15,407 units, down
20.47% MoM and 13.28% YoY; the publicized average price was RMB 39,162/sqm, up
0.09% MoM and 47.67% YoY.
2. Transaction Volume by District
By district, the transaction volume declined across the board on a monthly basis in April.
Jing’an District saw the smallest MoM decrease because of its advantageous location and
well-developed living facilities. Among exurban districts, Chongming was the district
seeing the smallest decrease.
22,000
24,000
26,000
28,000
30,000
32,000
34,000
36,000
38,000
40,000
42,000
0
10,000
20,000
30,000
40,000
50,000
60,000
16-4 16-5 16-6 16-7 16-8 16-9 16-10 16-11 16-12 17-1 17-2 17-3 17-4 RMB/m2
Transaction Volume and Price of Second-hand Housing
Transaction volume (unit) Average transaction price (RMB/㎡)
Units
-35.00%
-30.00%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Bao
shan
Ch
angn
ing
Ch
on
gmin
g
Fen
gxian
Ho
ngko
u
Hu
angp
u
Jing'an
Jiadin
g
Jinsh
an
Luw
an
Min
han
g
Nan
hu
i
Pu
do
ng
Pu
tuo
Qin
gpu
Son
gjiang
Xu
hu
i
Yangp
u
Zhab
ei
UnitsTransaction Volume of Second-hand Residential Housing by District, Mar vs Apr 2017
March April 环比
Average MoM
Growth
URBAN VIEW -14-
3. Hot Sections
Top 10 sections in terms of MoM increase in second-hand residential transaction volume in April 2017
Rank District Section No. of Units
Transacted MoM YoY
1 Jing’an West Nanjing Rd. 52 30.00% 0.00%
2 Jinshan Zhujing 112 25.84% -27.27%
3 Xuhui Fenglin 127 7.63% 10.43%
4 Putuo Changshou 61 3.39% -8.96%
5 Jinshan Middle Jinshan 70 2.94% 100.00%
6 Pudong Zhangjiang 122 -1.61% 24.49%
7 Jinshan Tinglin 61 -1.61% 38.64%
8 Baoshan Yanghang 111 -1.77% -21.28%
9 Pudong Waigaoqiao 308 -1.91% -6.10%
10 Baoshan Luodian 86 -2.27% -16.50%
4. VISS Base Price
According to the
statistics of VISS
system, in April 2016,
the city’s mean of
residential quarters was
RMB 53,813/sqm, up
1.86% MoM and 29.62% YoY; the city’s median of residential quarters was RMB
56,057/sqm, up 2.29% MoM and 33.28% YoY.
BS CN CM FX HK HP JA JD JS LW MH NH PD PT QP SJ XH YP ZB
Mar 2017 1.85% 1.67% 0.72% 2.52% 1.45% 1.26% 1.51% 1.97% 4.90% 1.30% 1.94% 2.26% 1.28% 1.44% 2.34% 2.94% 1.11% 1.56% 1.68%
Apr 2017 2.06% 2.15% 4.61% 3.07% 1.77% 2% 1.89% 2.12% 3.24% 2% 1.87% 2.14% 1.54% 2.17% 2.34% 2.22% 1.61% 1.85% 2.24%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%MoM Change of Base Price by District, Mar vs Apr 2017
Mean Median
URBAN VIEW -15-
By district, in April, all the districts continued seeing different increases in base price,
and the increases of most districts became larger compared with last month, which
ranged from 1.54% to 4.61%. The increases of exurban districts were larger than those of
most central districts.
By section, in April, the 121 sections of the city continued seeing different increases of
price. All of the top 5 sections in terms of increase were exurban sections.
5. Transaction Structure
Top 5 sections in terms of increase Top 5 sections in terms of decrease
South Songjiang
Sheshan
Baozhen
ChongmingNew Town
Zhujiajiao
10557 11539 9.31 %
27880 30340 8.82 %
11722 12678 8.15 %
20296 21355 5.22 %
21520 22534 4.71 %
No ne
below 7050.38%
70-9022.22%
90-12015.06%
120-1507.23%
150-1801.87%
180-3002.68%
above 3000.55%
Transaction Structure Second-hand Housing by Area, Apr 2017
below 0.5m3.17%
0.5m~1m7.16%
1m~1.6m13.95%
1.6m~2m9.89%
2m~3.3m39.21%
3.3m~5m13.25%
above 5m13.37%
Transaction Structure of Second-hand Housing by Total Price, Apr 2017
below 7051.35%
70-9021.88%
90-12015.03%
120-1507.23%
150-1801.74%
180-3002.26%
above 3000.51%
Transaction Structure Second-hand Housing by Area, Mar 2017
below 0.5m3.08%
0.5m~1m7.18%
1m~1.6m14.23%
1.6m~2m9.94%
2m~3.3m39.63%
3.3m~5m13.57%
above 5m12.37%
Transaction Structure of Second-hand Housing by Total Price, Mar 2017
m = million
URBAN VIEW -16-
By total price, the proportion of second-hand properties priced over RMB 5 million saw
a growth of 1 percentage point. The proportions of second-hand properties priced below
RMB 5 million saw different decreases, all of which were smaller than 0.5 percentage
point.
By area, only the proportion of second-hand properties smaller than 70 sqm dropped by
0.97 percentage point. The proportions of second-hand properties larger than 70 sqm
increased across the board. However, the growth was lower than 0.5 percentage point.
URBAN VIEW -17-
Urban Analysis——Retail / Office Market
1. Supply
1) Monthly Retail / Office Supply
The supply market of retail/office properties remained sluggish. There was still no new
office projects launched, and only 15000 sqm of new retail properties were supplied.
2) Retail / Office Supply by District
In April, there were still only retail projects launched, which were located in Jiading,
Qingpu and Minhang. The supply volume was 7853 sqm, 6789 sqm and 116 sqm,
respectively.
0
10
20
30
40
50
60
70
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04sqm
Trend of Retail / Office Supply
Retail property Office property
x 1
00
00
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
Jiading Minhang Qingpusqm
Retail / Office Supply by District, Apr 2017
Retail property
x 1
00
00
URBAN VIEW -18-
2. Transaction Volume
1) Monthly Retail / Office Transaction Volume
Influenced by the “frozen” supply market of retail and office properties, the transaction
was also not promising. There were 128000 sqm of retail properties transacted, down
47% MoM; there were 45000 sqm of office properties transacted, decreasing by over
80% compared to the same period of last year.
2) Retail / Office Transaction Volume by District
By district, Qingpu led the retail transaction with 28000 sqm of retail properties traded.
In office sector, under the continuous support of Greater Hongqiao project, Minhang had
14000 sqm of office properties transacted, becoming the district with largest office
transaction volume.
0
10
20
30
40
50
60
70
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04sqm
Trend of Retail / Office Transaction Volume
Retail property Office property
x 1
00
00
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Ba
osha
n
Ch
an
gn
ing
Ch
on
gm
ing
Fen
gxia
n
Ho
ng
kou
Hu
an
gp
u
Jiad
ing
Jinsh
an
Jing
'an
Min
ha
ng
Pu
do
ng
Pu
tuo
Qin
gp
u
So
ng
jian
g
Xu
hu
i
Ya
ng
pu
sqm
Retail / Office Transaction Volume by District, Apr 2017
Retail property Office property
x 1
00
00
URBAN VIEW -19-
3. Transaction Price
In April, the average price of both retail properties and office properties fell. The average
transaction price of office properties declined by 26.4% to RMB 27418/sqm. The average
transaction price of retail properties dropped by 2.6% to RMB 25749/sqm. The
increasing proportion of low-priced transacted projects in suburban and exurban districts
largely pulled down the average price.
4. Inventory Change
Because of the consecutive shortage of new supply, the digestion of inventories played a
leading role on the transaction market. At the end of April, the office inventories declined
to 8145300 sqm. The retail inventories totaled 9864100 sqm.
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
16/04 16/05 16/06 16/07 16/08 16/09 16/10 16/11 16/12 17/01 17/02 17/03 17/04RMB/sqm
Trend of Average Transaction Price
Retail property Office property
400
500
600
700
800
900
1000
1100
12
/01
12
/04
12
/07
12
/10
13
/01
13
/04
13
/07
13
/10
14
/01
14
/04
14
/07
14
/10
15
/01
15
/04
15
/07
15
/10
16
/01
16
/04
16
/07
16
/10
17
/01
17
/04
sqm
Monthly Change of Retail / Office Inventory
Retail property Office property
x 1
00
00
URBAN VIEW -20-
Cost of Construction Materials
Prices of steel, cement, yellow sand and commodity concrete in April 2017
No. Material name March 2017 April 2017 Increase or decrease
1 Wire price (Φ8mm) (RMB/ton) 4,033.87 3,820.90 -5.57%
2 HRB400 rebar (18mm) (RMB/ton) 3,864.65 3,630.10 -6.46%
3 HRB400 Rebar (25mm) (RMB/ton) 3,896.00 3,660.10 -6.45%
4
Ordinary Portland cement (strength grade
42.5) (RMB/ton)
378.39 411.00 7.94%
5 Yellow Sand (medium-coarse) (RMB/ton) 80.16 88.20 9.11%
6
Pump Concrete C30 (particle size 5-25)
(RMB/m³)
388.00 414.00 6.28%
URBAN VIEW -21-
Construction Cost Analysis Indicators
I Project Summary
Project name R&D Office Building GFA 25,733 m2
Project location Within the Middle Ring Road Height 47.5 m (first floor 5.5m, typical floor
4.2m)
Structure Frame-shear Total Floors 10 floors aboveground; 1 floor
underground
Foundation
depth 5.85m
Seismic fortification
intensity 7
Function R&D Office Building Method of charging 08 BOQ valuation (2013.05-2015.04)
II Construction Cost Indicators
No. Item Total cost (RMB) Index per sqm
(RMB/m2) Percentage
Cost for engineering & installation 83,646,490 3,250.55 100.00%
I Engineering works 40,522,300 1,574.72 48.44%
1 Soil (Stone) works 2,576,100 100.11 3.08%
2 Piling & foundation 10,340,000 401.82 12.36%
3 Masonry 2,123,100 82.50 2.54%
4 Concrete and rebar concrete 20,148,100 782.97 24.09%
5 Factory & warehouse door, special
door 1,839,000 71.46 2.20%
6 Roofing & waterproofing (incl. thermal
insulation) 979,000 38.04 1.17%
7 Anti-corrosion, insulation, thermal
insulation 2,517,000 97.81 3.01%
II Decoration works 8,331,800 323.78 9.96%
1 Ground & floor 1,702,900 66.18 2.04%
2 Doors & windows 3,225,700 125.35 3.86%
3 Cylinder & wall 1,822,100 70.81 2.18%
4 Ceiling 1,112,100 43.22 1.33%
5 Paints, coatings, wall paper 125,000 4.86 0.15%
6 Others 344,000 13.37 0.41%
III Installation works 17,034,100 661.96 20.36%
1 Electrical Engineering 5,847,500 227.24 6.99%
2 Water supply & drainage 513,300 19.95 0.61%
3 Fire protection 3,144,400 122.19 3.76%
4 Air-conditioning & ventilation 4,388,600 170.54 5.25%
URBAN VIEW -22-
5 ELV 1,410,700 54.82 1.69%
6 Elevator 1,729,600 67.21 2.07%
IV Measure fees 11,781,200 457.82 14.08%
V Main-contractor service fee 178,290 6.93 0.21%
VI Government gees 3,230,700 125.55 3.86%
VII Taxes 2,568,100 99.80 3.07%
Shanghai Urban Construction Cost Consulting Co. Ltd.
URBAN VIEW URBAN VIEW -23-
URBAN VIEW -24-
Targeted increase of loan rate begins
Recently, it was said that some banks in Beijing released new notices on home loan
rate. The loan rate of first home mortgaged after May 1 can be as low as the
benchmark interest rate; the loan rate of second home mortgaged after that May 1
would be raised by 20%; the loan rate of first home mortgaged before April 30 can be
as low as the 95% of benchmark rate. It was also said that many banks in Shanghai
have raised the first home loan rate from previous 90% of the benchmark rate to 95%
or even the same as the benchmark rate. Moreover, some banks in Shenzhen and
Guangzhou also successively reduced the concessions of first home loan rate. As all of
these cities are first-tier hot cities, it was called “targeted increase of loan rate” in the
industry.
URBAN VIEW -25-
Urban View:
Shao Minghao
Project Director
Shanghai Urban Real Estate Appraisal Co., Ltd.
We should first notice that the “targeted increase of loan rate” in Beijing was made by
“some banks”, which meant it was not a universal action. In other words, it was an
action of banks’ own accord based on their business situation, instead of an
administrative order. From this point of view, the targeted increase of loan rate was not
a necessary step of Beijing’s macro-control.
Why did these banks make “targeted increase of loan rate”? I think there are many
factors. First of all, the home lending quotas of some banks are small (not all the banks
put great efforts to develop mortgage business). After the boom of housing market in
Beijing from the second half of last year to the first quarter of this year, the fact that
there is not much of the quota left now may be the most direct reason for their
adjustment on loan rate. Secondly, it was the increase of loan rate instead of the
increase of down payment requirement or the tightening of other conditions, which
indicated that the purpose of the banks was not curbing the demand for home purchase
but improving their profits from lending business. To get more mortgage lending
business, most commercial banks have provided discounts of loan rate as enticement
for a long time. When their annual quotas of lending became not enough, it is a normal
commercial behavior to select the high-quality clients who can bring higher profits
through raising the loan rate. Besides, influenced by multiple rounds of regulation on
real estate market, mortgage lending is no longer the best business choice for banks.
Although the loan rate adjustment was an autonomous behavior of some banks, from a
nationwide perspective, people will still raise two questions. One is whether other
banks will follow them, and the other is whether it will become the prelude of
URBAN VIEW -26-
nationwide interest-rate rise. The first question is easy to answer. If mortgage lending
is not the main part of a bank’s asset allocation and the bank has already lent a large
amount over the past period, this bank is very likely to raise the loan rate to enhance
its profits. Of course, not all the banks have to do like this as there is no administrative
order. The second question is difficult to give answer. According to some indicators
such as “China inter-bank offered rate”, the rise of rates is under pressure. Especially,
the external stimulus from the Fed’s increase of interest rates can justify the domestic
rise of rates. However, domestic economic data do not support the increase of rates.
The increase of rates will make the economic uncertainty worse. Furthermore, under
stagnant real economy, where can the capital extruded from the real estate market go?
URBAN VIEW URBAN VIEW -27-
URBAN VIEW -28-
Study on quantitative analysis of the ecological benefits
from land reclamation in suburbs of metropolis
1. Brief of the subject and source of the data
1.1 Brief of the subject
Langxia Town Land Reclamation Project is located in Langxia Town of Jinshan
District, Shanghai. The project covers a total area of 1687.34 hectares, with a total
investment of RMB 709,659,800. The project commenced in October 2013 and
completed in December 2014, including land leveling, river improvement, irrigation
and drainage, country road works, farmland shelterbelt works, and ecological
conservation.
URBAN VIEW -29-
Figure 1 Location map of the subject
1.2 Source of the data
The data involved in this article are mainly from the approved plan of the project. The
social and economic data are from relevant official websites and Shanghai Statistical
Yearbook.
2. Contents and methodology of ecosystem services valuation
2.1 Contents of ecosystem services valuation
Tab.1 Contents of Ecosystem Services Valuation
Category Sub-category Valuation Content
Supply service Food production ——
Raw material production ——
Regulation service Gas regulation Carbon fixation and oxygen
production
Air purification
Greenhouse gas emission
URBAN VIEW -30-
Climate regulation Climate regulation
Hydrological regulation Water storage
Waste treatment ——
Support service Soil conservation ——
Biodiversity maintenance ——
Cultural service Landscape aesthetics Ecological recreational service
2.2 Methodology of ecosystem services valuation
2.2.1 Gas regulation
(1) Carbon fixation and oxygen production
According to the literature, the general formula for the value of carbon fixation and
oxygen production of crops per unit area is:
Crop: VN=N×S×B×t N=J×(1-r)/f Formula 1
Tree: VL=L×A×B×t Formula 2
VN is the value of carbon fixation and oxygen production of crops; N is net biomass;
S is the area of crops; B is the cost of carbon fixation and oxygen production; t is the
coefficient of carbon fixation and oxygen production (the coefficient of carbon
fixation is 1.63; the coefficient of oxygen fixation is 1.20); J is the economic yield of
crops; r is the moisture content of the economic yield of crops; f is the economic
coefficient of crops; VL is the value of carbon fixation and oxygen production of
shelter forest; L is the net annual primary productivity of shelter forest; A is the tree
number of shelter forest.
(2) Air purification
The subject area has a large space of rice fields and shelter forest, which can purify
the air of the subject area. However, there is no factory releasing contaminant in the
subject area. Therefore, we only consider the ecosystem value of dust absorption
function.
URBAN VIEW -31-
Vd= Cd×Qd Formula 3
Vd is the value of dust absorption function; Cd is the cost of reducing dust absorption;
Qd is the amount of dust absorption. Qd = amount of dust absorption of rice field per
unit area × newly-increased rice field area + area of shelterbelt × amount of dust
absorption of shelterbelt per unit area; area of shelterbelt = tree numbers of shelterbelt
× interplant distance × width of shelterbelt
(3) Greenhouse gas emission
① Calculation of greenhouse gas emission
The formulas for calculating the increased emissions of N2O and CH4 after land
reclamation are as follows:
N2O emission =area of new irrigated rice fields × annual emission of N2O of rice
fields Formula 4
CH4 emission = area of new irrigated rice field × annual emission of CH4 of rice
field Formula 5
② Loss value of greenhouse gas emission
In the valuation of global ecosystem services, Costanza used RMB 0.91/kg and RMB
24.37/kg to analyze the loss value of CH4 and N2O.
Vw = CH4 emission×RMB 0.91/kg + N2O emission×RMB 24.37/kg Formula 6
2.2.2 Climate regulation
Pleasant temperature and humidity can provide comfortable environment for people,
where people can get intangible benefits. The intangible benefits should be included
in ecological benefits.
P=(N/��)Pi Formula 7
In this formula, P is the adjusted value of ecosystem services per unit area, Pi is the
URBAN VIEW -32-
benchmark unit price of the ecosystem, N is the annual net biomass of the ecosystem
before/after land reclamation, and N�is the average biomass of ecosystem per unit
area in China.
2.2.3 Water storage
To consolidate scattered parcels and make the rate of newly increased cultivated land
reach over 3%, many ponds, waters for aquaculture and beheaded creeks in the
subject area are filled.
Vx=W×C W=W1+W2 Formula 8
In the formula, Vx is the value of water storage function, W1 is the difference between
the excavation amount and filling amount of ponds, waters for aquaculture and
beheaded creeks, W2 is the difference between the amount of river dredging and
excavation and the amount of filling, and C is the cost of reservoir storage.
2.2.4 Cultural service
The value of environment and landscape of the subject after land reclamation can be
represented by its tourism value.
Vt=(travelling expenses + travelling time cost + other expenses) × passenger flow
Formula 9
2.2.5 Ecological benefits amendment
Because of inflation, the same amount may have different actual value in different
years. Therefore, we discount all the function values to the values in 2014 using CPI
growth over the years, which can represent the values of different functions of the
ecological environment.
URBAN VIEW -33-
Tab.2 Shanghai CPI growth over the years %
3. Research Results
3.1 Gas regulation
According to the project plan, after land reclamation, the cultivated land area will
increase to 1266.77 hectares from 1210.87 hectares; the types and numbers of trees of
the newly-increased farmland and shelterbelt are listed in table 3:
Tab.3 Basic introduction of new added farmland shelterbelt
Unit: plant
Tree Type Number
Metasequoia 18352
Taxodium mucronatum 5682
Weeping willow 2457
Gingko 1691
(1) Carbon fixation and oxygen production
After land reclamation, the irrigated rice field area rose to 985.46 hm2 from 904.83
hm2, up 80.63 hm2. Moreover, under the support of shelter forest and irrigation
facilities, the output per mu of rice field increased from 569.2kg/mu to 654.58kg/mu.
According to some previous researches, the economic coefficient of rice f=0.45; the
water content of rice seed r=27.17%. Using the formula, we can derive that the net
annual biomass of rice before land reclamation is 27.64t/hm2, and the net annual
biomass of rice after land reclamation is 31.78 t/hm2.
The trees are mainly metasequoias which are suitable for local environment. There are
totally 28479 trees. Referring to relevant literature, the net annual biomass of
metasequoia is 4.27kg/plant.
Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CPI 102.80 100.00 101.50 102.50 100.00 100.50 100.10 102.20 101.00 101.20 103.20 105.80 99.60 103.10
URBAN VIEW -34-
According to relevant literature, the value of CO2 fixation is RMB 273.3/t, and the
value of oxygen production is RMB 352.93/t. Using Formula 1 and Formula 2, we
can calculate that the value of carbon fixation and oxygen production can rise by
RMB 5,592,200 after land reclamation. The details are shown in table 4:
Tab.4 Value change of carbon fixation and manufacturing oxygen after land reclamation (in
RMB 10000)
New irrigated rice
fields Old rice fields Shelter forest Subtotal
Value of
carbon
fixation
114.16 167.10 5.42 286.68
Value of
oxygen
production
108.53 158.86 5.15 272.54
Total 559.22
(2) Air purification
The newly increased area of irrigated rice fields is 80.63 hm2, the average interplant
distance of the shelter forest is 2.25m, the width of shelter forest is 0.8m, and the
shelter forest has 28479 trees. Thus, we can derive that the area of shelter forest is
51262.2m2. According to the literature, the dust absorption function of rice field is
0.92t/hm2/a, the dust absorption function of shelter forest is 3.15t/hm2/a, and the cost
of reducing dust absorption is RMB 150/t.
Using Formula 3, we can derive that the value of dust absorption function after land
reclamation increases by RMB 13500.
(3) Loss value of greenhouse gas emissions
After measurement, the annual emission of N2O is 1.63kg/ha and the annual emission
of CH4 is 15.3g/m2 in south China under general condition.
Using Formula 4 and Formula 5, we can get the newly-increased emission of
greenhouse gas, and according to Formula 6, we can derive the value of loss caused
URBAN VIEW -35-
by the newly-increased emission of greenhouse gas is RMB 14500.
3.2 Climate regulation
According to the literature, the benchmark unit price of farmland ecosystem is RMB
435.63/hm2/a, and the average biomass per unit area of China’s farmland ecosystem is
50t/hm2. According to the Table 6-6, we know that the original cultivated land area is
1210.87 hm2, and the cultivated land area after land reclamation is 1266.77 hm2.
Using Formula 7, we can derive that the value of climate regulation of the subject
land reclamation project increases by RMB 59200.
3.3 Water Storage
Tab. 5 Basic information on excavation and filling
Item Work Quantity/10000 sqm Notes
Pond earth 2.37 Excavation
85.6 Filling
Beheaded creeks
0.17 Excavation
12.8 Filling
River
49.58 Excavation
14.43 Dredging
23.5 Filling
According to the difference between the excavation amount and the filling amount in
Table5, we can derive that the amount of filling is 1219000 sqm and the amount of
excavation is 665500 sqm. In other words, the water storage volume decreases by
553500 sqm (553500t). According to relevant literature, the cost of reservoir storage
is RMB 0.67/t.
Using Formula 8, we can derive that the loss value of water storage function is RMB
370800.
URBAN VIEW -36-
3.4 Cultural service
The cultural service value of the subject includes transportation fee, admission ticket
fee, picking fee, food expense and time cost, the details are as follows:
(1) Transportation fee: Going to the land reclamation project area of Langxia Town
for a trip from People’s Square metro station will take 1.5 hours. The distance is about
81.1 kilometers. According to the fuel consumption per hundred kilometers, the
gasoline price, the number of passengers and the parking rate of Langxia countryside
park, we can derive that the transportation fee for a round trip is RMB 21.5/person.
(2) Admission fee: Now most areas of the subject are open for the public for free.
Langxia Ecological Park requires RMB 50/person, however, not all the visitors will
buy tickets to visit this park. We set the buying rate as 75%; then, the average
admission ticket fee is RMB 37.5/person.
(3) Picking fee: Picking garden is the most popular area of the subject. Taking
strawberry picking as example, the price is about RMB 30/person/500g. Usually, each
visitor will pick 1-1.5kg strawberries (using the average – 1.25kg), then the visitor’s
purchasing power is RMB 75/person.
(4) Food expense: The restaurants in the vicinity of the subject include Jinjiang
Zhonghua Village Farm House and Langxia Ecological Garden. According to the
average consumption per person in Jinjiang Zhonghua Village Farm House, the
visitor’s food expense is about RMB 50/person.
(5) Time cost: According to the website of Shanghai Human Resources and Social
Security Bureau, the average salary of employees in Shanghai in 2014 is RMB 65417
and the monthly wages averages RMB 5451. We can thus calculate that the daily
wages are RMB 181.7/day/person so the time cost is RMB 181.7/day/person.
According to the current visitor flow, we can estimate that the annual visitor flow of
URBAN VIEW -37-
the subject is 106000 persons.
Using Formula 9, we can derive that the value of cultural service increases by RMB
38,764,200.
3.5 Ecological benefits amendment
The changes of ecosystem services of the subject before and after land reclamation
are as follow:
Tab.6 Value of ecosystem service value change in the project area
Item Carbon fixation &
oxygen production
Air
purification
Greenhouse gas
emission
Climate
regulation
Water
storage
Cultural
service
Year 2007 2014 1997 2007 2014 2015
Value 559.22 1.35 -1.45 5.92 -37.08 3876.42
The results after amendment based on past CPI increases are as follow:
Tab.7 Amendment value of ecosystem service value change in the project area
Carbon fixation &
oxygen production
Air
purification
Greenhouse gas
emission
Climate
regulation
Water
storage
Cultural
service Total
712.38 1.35 -2.07 7.54 -37.08 3876.42 4558.5
4
4. Conclusion
(1) Land reclamation can produce relatively high ecological benefits. According to
calculation, the ecological benefits of the subject have a net increase of RMB
45585400 after land reclamation. According to the project plan, the economic benefits
can have a net increase of RMB 26711700 after land reclamation. It shows that the
ecological benefits brought by land reclamation are much larger than the economic
benefits. However, not all the ecological benefits can be converted into economic
benefits.
(2) Land reclamation produces negative influence on the greenhouse gas emission and
URBAN VIEW -38-
water storage service values of the subject area, and the negative influence on the
latter is the largest.
(3) Land reclamation produces positive influence on the value of carbon fixation and
oxygen production, air purification, climate regulation and cultural service. Its
influence on the net benefit of cultural service is the largest, accounting for 85.04% of
the overall ecological gain of the subject.
URBAN VIEW URBAN VIEW -39-
URBAN VIEW -40-
Policy: Provisions on strengthening the administration of
business-oriented land transaction
The official website of Shanghai government released Several Provisions on
Strengthening the Administration of Business-oriented Land Transaction on April 21.
The document required strengthening the life cycle administration of
business-oriented land transaction and set forth several new important provisions on
the transaction of retail and office land.
Urban View:
The most eye-catching
part in the Provisions is
the requirement that
“transaction contract shall
clarify that office land is
not allowed to be used for
building apartment-office
projects; retail land is not
allowed to be used for
building service apartments without agreement.”
Under such explicit stipulation by the government, the existing “quasi-residential”
projects will become rarity. As far as we know, the previously halted
“quasi-residential” projects are just part of the all. Those projects which are still for
sale will certainly become the focus of investors.
There are also articles in the Provisions requiring that land transaction contract shall
define the holding percentage and years of retail and office properties. The Provisions
also pointed out that “the office and retail space available for sale as agreed in the
transaction contract should be sold in floor. Previously, many retail and office space
were developed into small-sized units for quick sale, which caused great difficulty in
management and therefore led to the failure of project operation. Under butterfly
effect, it became one of the reasons for the high inventories of retail and office
properties.
URBAN VIEW -41-
Finance: The sale of new housing adopts notarized lottery in
Shanghai In May, Shanghai Commission of Housing and Urban-Rural Development issued a
notice requiring that the sale of newly launched projects shall adopt lottery held by
notary organization; the purchase shall strictly follow real-name registration system;
any additional fees or charges are not allowed; staff of developers, agents and
brokerages are not allowed to sell the numbered tickets; any developers violating the
stipulation will be halted from selling and their qualification will be degraded or
cancelled.
Urban View:
Actually, lottery sale has already become a usual tactic of many developers before the
issuance of this notice. However, at that time, developers were over entitled to
manipulate the supply of housing, which resulted in various illicit phenomena, such as
waiting fee, disguised price increases. Unstandardized lottery sale provides large
space for developers’ backroom deal. Therefore, to ensure the fairness and
impartiality as much as possible, Shanghai adopts lottery for home purchase. This
measure, along with other regulatory policies on real estate market, can curb the
speculation and panic purchase, protect the interests of ordinary buyers and make the
real estate market more stable and sound.
As a key first-tier city,
Shanghai’s new regulatory
policy on real estate
market is like a direction
for surrounding cities.
From this point of view,
other first-tier cities under
similar conditions are
likely to follow this
notarized lottery.
URBAN VIEW -42-
Market: CBRC requires preventing risks in ten major fields On April 10, China
Banking Regulatory
Commission released
Guiding Opinions on the
Risk Prevention and
Control of Banking
Industry. The purpose is
to urge banking financial
institutions to dispose a
batch of major risk
points, eliminate a batch of hidden risks, and further improve the level of risk
management. The Guiding Opinions define the ten major fields of risks in banking
industry, including both traditional fields (such as credit risk, liquidity risk, real estate
risk and local government debt default risk) and non-traditional fields (such as bond
volatility risk, cross-financial risk, Internet financial risk, and external impact risk).
Urban View:
The high leverage contributed by 0% down payment is one of the important factors of
the excessively rapid jump of home price. In first-tier cities where home price is
already high, 30% down payment is usually as much as nearly RMB 1 million, which
is a very great amount of money for most ordinary buyers. “Down payment loan”,
appearing as a financial instrument, then becomes the best tool to solve the problem
of financing. However, it also encourages the demand of speculation. The speculators
can reap staggering profits through “down payment loan”, which brings many risks to
the real estate market.
Fortunately, now the administration takes measures to regulate the industry. In
addition to cracking down on the “down payment loan”, the administration also
requires that banks must strictly control the scale of mortgage lending and avoid
overly lowering the rate. For some time to come in the future, the tightened policies
on mortgage lending may continue and is unlikely to change in the short run.
URBAN VIEW -43-
Market: The State Council encourages the development of housing
rental market
On the executive meeting of the State
Council on May 4, the Premier of the
State Council required cultivating and
developing housing rental market and
pushing forward new urbanization to meet
people’s housing demand. This meeting
set forth measures on four aspects to
support the development of housing rental
market, including using existing housing
or newly-built housing to develop rental business; promoting the monetization of
public rental housing; improving tax preferential policy; using standardized format of
tenancy agreement.
Urban View:
According to the research on cities with well-developed real estate market, the people
that rent housing accounted for 65% of the population while the people own housing
merely accounted for 35%. Therefore, in the long term, leasing will play an absolutely
leading role in future’s housing market. However, the professional leasing business in
China is less developed now. Most developers make profits through selling instead of
leasing. There are some pilot products of professional leasing business, such as long
tenancy apartment which provides fully furnished units by the developer renting a
whole building and making uniform decoration. Nevertheless, the long tenancy
apartments are mainly converted from commercial properties, showing the
insufficiency of supply. Therefore, considering the current situation of China,
individual housing leasing shall also be supported and standardized. After all, the high
homeownership rate will offer powerful support to the supply on housing rental
market.
URBAN VIEW -44-
Market: The bidding threshold of residential land further enhanced
On April 11, Shanghai Land Transaction Center announced that three parcels of
residential land in Luchaogang of Lingang and Fengcheng Town of Fengxian, which
were suspended from transaction because of unfinished fund auditing, would be
supplied to the market again, but the previous listing procedure was changed to
bidding and listing procedure.
Urban View:
After the “Six Regulatory
Policies on Real Estate
Market” in last year, the
government enhanced the
eligibility of purchasing
residential land by
requiring that the bidders
shall use equity fund and the bidding price shall not be higher than their declared
equity fund. From then on, the boom of residential land transaction market was
somewhat mitigated. However, as the market was gradually adjusted to the new
policies, the transaction premium rapidly increased again. For example, the three
residential parcels in Luchaogang and Fengxian attracted double-digit bidders, and the
transaction of these land parcels were thus halted.
In bidding mode, the bidders will be graded from the aspects of economic strengths,
technical qualifications and project experience. The top three will be included in the
finalist of bidding. It is a reshuffling of land purchasers. The compound mode of
bidding and listing can effectively control the number of residential land bidders in
three. The reduction of bidders can make land purchase more rational and avoid high
premium, which will to some extent control land price.
URBAN VIEW -45-
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for its accuracy.
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