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Christopher Wood christopher.wood@clsa.com +852 2600 8516<br />
officials and media, though there is never any hard data to confirm this (see CLSA research China<br />
financials - CBIRC mandates love for private sector, 9 November 2018).<br />
Figure 6<br />
China residential real estate investment<br />
45<br />
40<br />
(%YoY)<br />
Residential real estate investment<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
(5)<br />
(10)<br />
Jan 10<br />
May 10<br />
Sep 10<br />
Jan 11<br />
May 11<br />
Sep 11<br />
Jan 12<br />
May 12<br />
Sep 12<br />
Jan 13<br />
May 13<br />
Sep 13<br />
Jan 14<br />
May 14<br />
Sep 14<br />
Jan 15<br />
May 15<br />
Sep 15<br />
Jan 16<br />
May 16<br />
Sep 16<br />
Jan 17<br />
May 17<br />
Sep 17<br />
Jan 18<br />
May 18<br />
Sep 18<br />
Source: CLSA, National Bureau of Statistics, CEIC Data<br />
Meanwhile if there is an area of the Chinese economy at risk of a further slowdown in coming<br />
months it remains the residential property market after the surprising resilience of residential<br />
property investment in the first three quarters of this year (see Figure 6). New landbank volume<br />
added by 26 CRR-tracked listed developers declined by 35% MoM and 42% YoY in October (see<br />
Figure 7). Facing tighter cashflow in 4Q18, CRR argues that developers are likely to slow land<br />
purchases further (see CRR Land Monthly – Correction continues, 23 November 2018).<br />
Figure 7<br />
YoY growth of land purchased by 26 CRR-tracked listed property developers<br />
1000%<br />
(%YoY)<br />
YoY-volume (LHS)<br />
YoY-value (RHS)<br />
800%<br />
600%<br />
400%<br />
200%<br />
0%<br />
-200%<br />
Jun 10<br />
Nov 10<br />
Apr 11<br />
Sep 11<br />
Feb 12<br />
Jul 12<br />
Dec 12<br />
May 13<br />
Oct 13<br />
Mar 14<br />
Aug 14<br />
Jan 15<br />
Jun 15<br />
Nov 15<br />
Apr 16<br />
Sep 16<br />
Feb 17<br />
Jul 17<br />
Dec 17<br />
May 18<br />
Oct 18<br />
Source: CRR<br />
The latest CRR property data also shows a further weakening (see CRR Property Monthly – More price<br />
cuts, 15 November 2018). Thus, home prices at CRR-tracked projects in 40 tier 2-3 cities declined<br />
by 0.1% MoM in October, the first correction since December 2017 (see Figure 8), while the share<br />
of projects planning to cut prices in the next three months rose from 4% in September to 11% in<br />
October. Also property sales in tier-1 cities rose by 11% YoY in October, down from 42% YoY in<br />
September, while sales in 14 tier-2 cities CRR tracks declined by 17% YoY in October (see Figure 9).<br />
Thursday, 29 November 2018 Page 5
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