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According to the Sales Rankings of Chinese Real Estate Companies for Q3 2009 by CRIC (China) Information Technology, in cooperation with China Real Estate Appraisal and Shanghai E-house R&D Institute, the recovery of the real estate market in China during the first three quarters of 2009 had a lot to do with sales in second tier cities. Sales generated in second-tier cities significantly increased, becoming the key factor influencing the performance of the
companies.
The report shows that second-tier cities are becoming increasingly important marketplaces for real estate companies.
Floor space sold in second-tier cities for the first three quarters of the year comprised 54% of the top 20 real estate companies’ total, far more than other cities, while sales revenues comprised 41%, up one percent from the first half.
Sales revenuse in first-tier cities comprised 37% of their total, down 3% from the first half.
Real estate developers like Evergrande Real Estate, long committed to expansion in second-tier Chinese cities, have entered more than 20 provincial capital cities. As China’s real estate market has rebounded, Evergrande Real Estate has expanded in second-tier cities, leading the market in sales volume, land reserves and surface area of projects under construction.
Reuters reported that Zhang Yongyue, president of Shanghai E-house R&D Institute and seen in our illustration, said the reshuffling of the Chinese real estate sector was inevitable given the recovery of the global economy.