Real Estate - China

China

The Real Estate market market in China is expected to reach a staggering value of €121.20tn in 2024.
It is worth noting that the Residential Real Estate segment holds the largest share in the market, with a projected market volume of €104.70tn in the same year.
Looking ahead, the market is anticipated to grow at an annual rate of 2.18% (CAGR 2024-2029), resulting in a market volume of €135.00tn by 2029.
When compared globally, United States stands out as the top contributor to the Real Estate market industry, generating the highest value of €121.20tn in 2024.
China's real estate market is experiencing a surge in demand for high-end luxury properties in major cities.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

China's Real Estate market has been experiencing significant growth and development in recent years.

Customer preferences: Chinese customers have a strong preference for investing in real estate. They view it as a safe and reliable investment option, especially considering the volatility of other financial markets. Additionally, owning property is seen as a symbol of wealth and social status in Chinese culture. As a result, many individuals and families strive to own multiple properties, leading to a high demand for real estate in the country.

Trends in the market: One prominent trend in the Chinese real estate market is the increasing popularity of urbanization. As more people move from rural areas to cities in search of better job opportunities and improved living standards, the demand for housing in urban areas has skyrocketed. This has led to the construction of numerous residential and commercial properties in major cities across China. Another trend is the rise of the middle class. With a growing economy and increasing disposable income, more Chinese citizens are able to afford their own homes. This has fueled the demand for affordable housing, particularly in the suburbs and smaller cities. Developers are capitalizing on this trend by constructing more affordable housing projects to cater to the needs of the middle-class population.

Local special circumstances: China's real estate market is heavily influenced by government policies. The Chinese government has implemented various measures to regulate the market and prevent speculative activities. These policies include restrictions on property purchases and loans, as well as the introduction of property taxes in certain cities. These regulations aim to control property prices and prevent the formation of real estate bubbles.

Underlying macroeconomic factors: China's rapid economic growth and urbanization have played a significant role in the development of the real estate market. As the country continues to urbanize and industrialize, more people are moving to cities, increasing the demand for housing and commercial properties. Additionally, favorable mortgage policies and low interest rates have made it easier for individuals to obtain financing for real estate purchases. Furthermore, foreign investment has also contributed to the growth of the Chinese real estate market. The government has relaxed restrictions on foreign property ownership, attracting overseas investors who see the potential for high returns in the Chinese market. This influx of foreign capital has further fueled the development of the real estate sector. In conclusion, the Real Estate market in China has been experiencing significant growth and development due to customer preferences for real estate investments, trends such as urbanization and the rise of the middle class, local special circumstances influenced by government policies, and underlying macroeconomic factors such as rapid economic growth, urbanization, and foreign investment.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.