China has finished an investment of 619.3 billion Yuan in real estate in the first half of this year, 23.5% more than the same period of 2004. This increase was 0.8% less than that of the first five months of 2005, and 3.2% less than that of the first quarter. The country’s real estate development market presented the following main features:

1. The share of the investment in commodity residence decreased as the share of the investment in economically affordable housing kept decreasing.

In the first half of the year, our country has invested 414.7 billion Yuan (increased by 21.3%) in commodity residence, accounting for 67% of the total investment in real estate, 0.8% less than the same period of last year. Office building investment cost 29.8 billion Yuan, accounting for 5% which increased by 0.2%. Investment in constructions for business and commercial use was 77.8 billion Yuan (23.8% increased) which took a part of 12.6% (0.1% more than the last year) of the total real estate investment. The investment in affordable housing, however, dropped by 14.6% to 20.4 billion Yuan, and the share correspondingly decreased from last year’s level of 4.8% to this year’s 3.3%.

2. The self-raised fund kept growing quickly, while the domestic loans decreased sharply.

In the first half of the year, the actual utilized fund of the real estate development companies was 946.5 billion Yuan, 23.3% more than that of 2004; the increased amount, however, was a little bit less than the normal level. The self-raised amount was 326.9 billion Yuan, increased by 37.6% which was 11% faster than that of the first quarter. The foreign fund, however, accounted for 12.6 billion, increased by 23.7%, which in the first quarter, however, decreased by 6.4%. The domestic loans amounted to 175.5 billion, 4.3% more than the last year; the increased amount fell by 7.8%. Seen by regions, in the west China, the domestic loans to real estate companies has only increased by 2.3%, while the amounts in the middle and the east China have increased by 12.5% and 3.6% respectively.

3. The earth exploitation and land space purchased developed slowly, and the newly constructed acreage decreased by a small amount.

In the first half of the year, the earth exploitation area completed 81.9 million square meters, increased by 3%, comparing to the decrease of 7.3% in the first quarter; the land space purchased was 163 million square meters, increased by 3.9%, 0.2% more than the amount of the first five months; the investment in land development accomplished 24.6 billion Yuan, increased by 3.7%. The newly exploited construction area was 312 million square meters, increased by 10.9%, which was 0.5% slower than the first five month speed. The newly constructed office buildings and apartments for business use was 6% and 7% less in acreage than the last year same level.

4. The increase of the sales area fell back; in some of cities it even decreased.

The sales area of the commercial housing was 125 million square meters in the first half of the year, 14% (6.3% lower than the first quarter of the year) more than in the last year. The sales area of the commodity residence was 112 million square meters, increased by 14.4%; the sales area of the constructions for business use was 9.23 million square meters, increased by 13.1% and of the office buildings was only 2.02 million square meters, which decreased by 9.6%. In eleven cities like Beijing, Taiyuan, Suzhou, Hefei, Sanya, Chongqing and Xi’an, the sales area of commercial houses kept growing at a high speed of over 30%; in Shanghai, however, the speed was 4.9%, 4.8% less than the first five months’ speed and 12.6% less than the level at the same period of last year; while in ten cities like Dalian, Nanjing, Ningbo, Changsha, Chengdu and Urumchi, the speed was negative

5. The average sales price of the commercial housing kept rising very fast.

The country’s average sales price of the commercial housing increased by 10.1% in the first half of the year, lower than the first quarter level of 12.5%, but 1.2% more than the first five months level. The increase of the average price of the commercial residence was 11.9%, 0.6% lower than the first five months amount. The sales price of the office building decreased by 4.6% and of houses for business use increased by 9.3%. Seen by region, the average sales price of the commercial houses in east China has increased by 9.7%, while in the middle and the west of China has increased by 11.8% and 12.5% respectively.

6. The vacant space of commercial housing kept increasing. The share of those vacant for more than a year was over 60%.

By the end of June, the vacant space of the country’s commercial housing was 104 million square meters, 7.9% more than the last year. Specifically, the vacant commercial residence was 58.84 million square meters, increased by 2.2%; the vacant office took 7.1 million square meters, increased by 4% and the vacant space for business use took an area of 28.78 million square meters, increased by 21%. Seen by vacant length, 62.87 millions were more than a year, accounting for 60.6% of all the vacant houses, 2.1% more than the same period of the last year.

The operation of the real estate development industry in the first half of the year illustrates that the macroscopic adjustment and control has taken effect, which was mainly reflected by the steady fall back of the investment in real estate development, the effective control over the fund supply and the land purchase scale and the positive change in the supply and demand relationship in the real estate market. However, the high rate of sales price increase of the commercial houses and especially of residence manifests that adjusting and controlling over the real estate industry and the house prices is none the less a heavy burden to our country. Therefore, we should keep on taking every adjustment and control measure to stable the house price, to improve the real estate development structure and to help our real estate development industry get on the right track.