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Prospects
Limitless Opportunities for Growth
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Unlike property markets in Shanghai and Beijing, Henan is at the budding stage of property development, where most of the housing sales are made to genuine and not speculative buyers.
In fact, the sector has been identified by the Henan Provincial government as one of the main growth drivers of the economy. It has also been accorded the status as one of the pillar industries in Henan.
Moving forward, we believe that the property markets in Zhengzhou, Anyang and Xinxiang put together, demonstrate a picture of growth demand in Henan's property market and provide limitless opportunities for growth. |
Growth Drivers Budding real estate market in Henan
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High rate of urbanization – 19.6% in 1997 vs 28.9% in 2004 |
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Rising number of properties sold in Henan - GFA of properties sold grew 377.3% from 2.2 million sq.m in 1997 to 10.5m sq.m. in 2004. |
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Increasing average sale price of residential properties - from RMB919 per sq.m. to RMB1,572 per sq.m. |
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Increasing affluence of urban residents in Henan – disposal income per capita has risen from RMB 4,094 in 1997 to RMB 7,705 in 2004. |
Positive government programmes and initiatives
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The Central Plains Urban Cluster Initiative
In 2003, the Central Plains Urban Cluster initiative was implemented whereby communities in the “Cluster” became the focus for transport and infrastructure investment and development. These such communities included Luoyang, Kaifeng, Xinxiang, Jiaozuo, Xuchang, Pingdingshan, Luohe, Jiyuan as well as 14 satellite cities, 34 county seats and 843 towns. |
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Totalling land area of approximately 58,700 square km and a population of about 39 million, these cluster cities and towns accounted for 55.2% of the provincial's GDP in 2003 and achieved an urbanization rate of 35.5% in 2003.
GDP of the cluster is projected to grow by 9.4% each year to reach RMB35,000 by 2020. The population is projected to reach 46 million by 2020 with 30 million or 65% of whom are expected to be living in urban cities. |
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Housing Reforms
With recent enterprise and housing reforms, the work units or danwei has been re-defined to adapt to the increased mobility of workers and changing attitudes toward privacy and personal space. New social patterns are evolving with more looking for better housing and living environment. |
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As such, there is increasing pressure for urban redevelopment schemes requiring the demolition of sub-standard danwei housing to build new housing – a trend prevalent in Zhengzhou, Anyang and Xinxiang .
This initiative has also created opportunities for buyers of danwei housing to realize substantial capital gains by trading up to bigger and better residential units and in return, contribute to the drive throughout the province in the secondary property market and in new purchases.
Coupled with rising disposable income and growing affluence, there is a growing desire amongst Henan residents to own properties. |
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