Blockbuster | The 2024 Top 50 Cities in China's Urban Real Estate Business Environment and Top 50 Cities with Investment Prospects were released

Introduction

1. Pattern: Among the northern cities, only Beijing ranks among the top 10, and the average ranking of cities in Jiangsu and Zhejiang provinces ranks among the top 50

2. Differentiation: The scale indicators of the first and second lines have significant advantages, and only a few of the third lines of the southeast coast rank among the forefront

3. Scale: Under the target of destocking, land transactions in key cities are generally smaller than the scale of housing transactions

◎ Text/CRIC Research Center

Interpretation of the list

Since 2024, the main tone of real estate policy has continued to be loose, and the residential credit policy has ushered in an "epic" benefit, with the down payment ratio reduced and the lower limit of housing loans cancelled. In terms of corporate financing, the real estate financing coordination mechanism has been accelerated, and nearly one trillion yuan of financing quota has been approved for whitelisted projects. On the demand side, the central bank launched a re-lending tool to support local state-owned assets to collect and store commercial housing, and various localities promoted the "trade-in" of housing, which also substantially promoted the transaction of some new housing projects. However, judging from the trend of transaction indicators, due to the high base in the first half of 2023, the year-on-year decline in new housing transactions across the country will expand to more than 20% in 2024, and the average decline in key first- and second-tier cities with better bottoming performance in 2023 will be as high as 30%. In the current difficult market environment, the stable bottoming of the industry needs the support of an excellent government environment, especially the reasonable control of the real estate market by local governments, and the timely introduction of strong regulatory policies, which is particularly critical to optimizing the development environment of the real estate industry. From the perspective of corporate investment, the consideration of profit margins and market competition should also be more prudent.

In order to meet the needs of industry development and changes, on the basis of previous years of research, CRIC Research Center has further upgraded the "Urban Real Estate Development Prospect Ranking" to the "Urban Real Estate Business Environment Ranking", and expanded the city sample to 297 prefecture-level cities on the basis of referring to the calculation ideas of the previous index system, further increasing the indicators such as urban government affairs environment, profit space, and market competition, and comprehensively evaluating the profit risk and investment opportunities of real estate projects in each city. A variety of mathematical tools such as factor analysis, correlation analysis, regression analysis, AHP analytic hierarchy process, and Delphi method are used to quantitatively study the business environment and real estate development prospects of urban real estate, analyze the prospect sources of different urban energy levels, and summarize the index characteristics of the top cities.

Comparing the rankings of the two lists, the rankings of the two lists of cities in terms of business environment and market development prospects have a strong correlation, which means that most of the cities with better overall business environment have better performance in the relevant technical indicators of their market development prospects, such as the top 10 cities in the business environment and the top 10 cities with development prospects, 6 cities are in the same ranking. There are also some differences in some cities, such as Shenzhen (3rd in business and 7th in prospects), with a large housing demand base and excellent performance in business environment indicators, but the performance of property market inventory, transactions and other indicators is not as good as other cities in similar rankings, and the city's real estate development prospects are significantly lower than those of the business environment. On the other hand, Xi'an (12th in business and 8th in outlook) has a higher ranking in terms of real estate development indicators than economic development and business environment.

PART 01

Pattern: Among the northern cities, only Beijing ranks among the top 10

The average ranking of prefectures and cities in Jiangsu and Zhejiang provinces ranks among the top 50

According to the evaluation results of the business environment list, most of the top 10 cities are located in the south of the Qinling-Huaihe River dividing line in China, and Beijing is the only northern city. After adding indicators such as government environment and profit margin, under a more relaxed business environment, the first- and second-tier cities in the south have shown more obvious development advantages.

Specifically, the top six are 4 first-tier cities and Hangzhou and Chengdu. Shanghai surpassed Beijing to rank first by virtue of the advantages of industry transaction scale and supply and demand indicators. Although Shenzhen's inventory and primary and secondary market scale indicators are relatively average, with excellent economic fundamentals and the development speed of foreign population, the long-term demand support evaluation is far ahead, and it is still ranked third. Hangzhou and Chengdu rely on better industry regulation and control capabilities, and the industry investment risk is relatively low, surpassing Guangzhou to rank 4 and 5 respectively.

From the perspective of the distribution of the top 50 cities, Jiangsu and Zhejiang provinces are the most densely distributed. As the core of the development of the Yangtze River Delta, Jiangsu, Zhejiang and Shanghai have formed a "3" shaped developed urban agglomeration corridor of "Nanjing-Southern Jiangsu-Shanghai-Hangzhou-Ningbo-Wenzhou", especially the Yangtze River basin in the Nanjing-Shanghai section, thanks to the support of the developed private economy, the income level of residents is in a leading position in the country, attracting a large number of foreign population, and almost all the cities on both sides of the strait are among the TOP50, and Zhenjiang, which ranks relatively low, is also ranked 51st. However, it should be pointed out that due to the early start of the real estate market in cities along the Shanghai-Nanjing route, the early investment is relatively saturated, and most of them are currently facing more severe pressure to de-industrialize, and the supply and demand indicators are warned, such as Nanjing, which has continued to decline in recent years, and the transaction scale of the new housing market has also fallen again and again, and the real estate business environment evaluation is only 14th, which is significantly lower than the economic development level of the city itself.

In addition, other prefecture-level cities in northern Jiangsu and southwest Zhejiang are also ranked in the top 100 in the country. Judging from the average ranking of prefecture-level cities, Zhejiang and Jiangsu are 39 and 45 respectively, which are the only two provinces with an average ranking within 50, as for Fujian, Shandong, Guangdong and other economically strong provinces, due to the unbalanced economic development in the province, the average ranking is after 80. For example, Quanzhou, Fuzhou and Xiamen on the coast of Fujian are ranked relatively high and are all in the TOP30 ranks, but Zhangzhou, Sanming, Longyan and Nanping are all ranked after the top 100.

In the first half of 2024, when the industry's capital is under pressure and land investment continues to tighten, there are still some urban land markets that have maintained a high degree of heat, and most of them are cities with better business environment evaluation, such as Suzhou, Hefei, Chengdu, Changsha, Shanghai, Xiamen, Hangzhou and other top 10 cities, and the average premium rate can still be maintained at more than 5%. In the context of the continuous downward trend of new home transactions in 2024, it shows a stronger market development resilience.

From the perspective of resource concentration, the top 50 cities in the real estate business environment have 34.6% of the country's permanent population, contribute 51% of GDP, and the per capita GDP reaches 1.5 times the national average. The performance of real estate indicators is better, with the transaction value of commercial housing in 2023 approaching 800 million yuan, reaching 67% of the national total, while the land transaction value only accounts for 30% of the country, and the land transaction value in the same period is only 32% of the transaction value of commercial housing, which well seizes the market decentralization opportunity in the first half of 2023 to accelerate destocking, and the transaction scale of new houses in the TOP50 cities is basically the same as that in 2022; A few cities, such as Chengdu, Tianjin, Hangzhou and other cities, have achieved a year-on-year rebound in the scale of new home transactions in 2023. It is precisely because of the high base in the first half of 2023 and the fact that the scale of the industry is still in the process of exploring the bottom downward, the transaction scale of the land and new housing markets in the top 50 cities in the first half of 2024 will inevitably usher in a general decline, with an average decline of about 30%. However, in view of the TOP50's stronger determination and execution in terms of destocking, the investment opportunities in the land market are still worth paying attention to for those high-quality sectors that can still maintain good popularity in the decentralization of land and new houses.

PART 02

Differentiation: The first and second line scale indicators have significant advantages

Only a few of the three lines of the southeast coast are among the top ranks

Judging from the comprehensive ranking of cities at various energy levels, the first- and second-tier cities are more comfortable in industry regulation and control by virtue of better demand indicators, and the first- and second-tier cities also perform better in terms of supply and demand, profit margins and other indicators that are highly concerned by the industry. As for the third- and fourth-tier cities, except for a few cities in the Yangtze River Delta and the Pearl River Delta that have certain industrial development advantages and attract a large number of foreign populations, most cities are subject to factors such as economic development and sluggish demand fundamentals, and it is more difficult to reshape the relationship between industry supply and demand.

From the perspective of short-term market trends, in the first half of 2024, the scale of new housing transactions in first-tier cities has dropped sharply by about 40%, and the narrow de-conversion cycle in Beijing, Guangzhou, and Shenzhen has also reached more than 20 months, and only Shanghai still maintains a healthy level of about one year, and the average premium rate of land auctions is also significantly lower than that of the same period in 2023, but high-quality scarce land plots in Beijing and Shanghai can still obtain high land auction popularity, such as the goldfish pond plot in Dongcheng District, Beijing, which has been auctioned at a rare high premium of 25%. Relying on the unique superposition advantages of economy and population primacy in China, even under the test of severe market fluctuations, the huge foreign population and a large number of high-income jobs in the first-tier cities still provide solid demand-side support, and the long-term low per capita housing area also represents the huge long-term backlog of housing improvement demand in the first-tier cities, which together constitute a solid and optimistic long-term development expectation of real estate in the first-tier cities.

The average ranking of second-tier cities is 31st, with the vast majority of them ranking within the top 50 in the country, except for a few provincial capitals with tight real estate supply and demand or in the northwestern provinces, and all second-tier cities in eastern China are among the top 30. In the first half of 2024, the rate of new housing can still be maintained at about 40%, and under the guidance of local governments such as "trade-in", it can still frequently usher in the opening lottery, and in the first half of 2024, the transaction of new houses will only decline by about 10% year-on-year, and the market stability is better than that of Hangzhou, Chengdu, Xiamen and other cities. As a well-deserved education and economic development center in the northwest region, Xi'an is expected to rank among the top 10 in the coming year if it maintains a rapid development momentum in terms of residents' income and urban economy, and balances the development relationship between the main urban area and the far suburbs. As for Nanjing, Zhengzhou and other cities with a low opening rate and a high digestion cycle, if local regulation and control fail to take effect as scheduled, indicators such as housing transactions and inventory pressure will further deteriorate, and the evaluation ranking may further decline in the coming year.

In terms of third-tier cities, some southeast coastal cities performed more prominently, with Wuxi, Shaoxing, Wenzhou, Quanzhou, Jiaxing, and Zhuhai among the top 30. Among them, Wuxi's performance is more prominent, ranking 16th in the forefront of third-tier cities, the city's development advantage mainly lies in the developed private economy, gathering more high-income groups, and the development model of strong counties and cities in southern Jiangsu also provides more possibilities for population migration in prefecture-level cities, and excellent improvement products can still obtain good performance. However, from the perspective of decentralization indicators, although Wuxi's 31-month digestion cycle is better than that of most third- and fourth-tier cities, there is still a big gap compared with the average level of first- and second-tier cities. Among the third- and fourth-tier cities in the north, Langfang ranks the highest, ranking 35th, and with the advantage of being close to the capital, Langfang has undertaken the spillover of some industrial development and housing demand, and has performed relatively well in terms of demand scale, affordability, population development and other indicators.

PART 03

Scale: Under the destocking target

Land transactions in key cities are generally smaller than housing transactions

Constrained by the rapid decline in the flow rate of new housing transactions, the pressure of decentralization in various cities has risen rapidly since 2022. By mid-2024, the average digestion cycle of third- and fourth-tier cities has reached more than three years, and even the average digestion cycle of the top 50 cities is also rising rapidly, with cities such as Shenyang, Dalian, and Kunming all reaching more than two years.

In the face of high inventory pressure, land transactions in most cities have generally been smaller than the scale of housing transactions in recent years, and they continue to be in the stage of industry destocking. In terms of the scale of housing transactions and land transactions, typical cities can be divided into four main categories:

The first category is high-scale cities, where the transaction volume of first-hand and second-hand houses still exceeds 10 million square meters, and the transaction volume of residential land is also more than 5 million square meters. Among them, Chengdu, Xi'an, Shanghai and Hangzhou are still cities with excellent performance on the demand side in recent years, and the land market has also maintained a relatively high level of popularity, such as Shanghai, after the lifting of the land price cap in mid-2024, the first land auction ushered in a high premium rate of 21%. Under the higher supply and demand volume of the industry, even if the city is facing certain difficulties, there are some sectors that can maintain good performance, such as Nanjing's new housing transaction scale has continued to decline in the past three years, and the digestion cycle has reached more than two years, and the opening rate of most projects is less than one percent, but the sales performance of the projects around the core area of Yuhua is acceptable, thanks to the support of industrial development and the price marketing of projects in the plate, it still maintains a good flow rate, and the current digestion cycle of the plate is also maintained at a healthy level within 10 months.

The second type is the typical land supply contraction city, these housing transactions are still maintained at more than 10 million square meters, but the scale of land supply narrowed to less than 5 million square meters, such as Shenyang, Foshan, Qingdao, etc., under the control of the local authorities for land supply more resolutely, the new housing market is also expected to restore the balance of supply and demand faster. For example, Qingdao's narrow digestion cycle in the middle of 2024 is only one and a half years, which is one of the very few cities where the digestion cycle has not increased and remains flat year-on-year, and Suzhou and Foshan are also better than Nanjing and Huizhou in the same province and at the same energy level.

The third category is low-scale cities, where the transaction volume of primary and second-hand houses is less than 10 million square meters, and the land transaction volume is less than 5 million square meters. Among them, a small number of cities in the past year inventory scale is still slowly increasing, of which Huzhou, Wuxi, Shaoxing is currently more than 30 months of narrow digestion cycle, the market inventory is highly pressured, and Jinhua urban digestion cycle is still maintained within 20 months, but in connection with the construction sales ratio of up to 7 months, the current Jinhua long-term inventory pressure is still high.

The fourth category is typical cities with high inventory, with low housing transaction volume and high land transaction volume, namely Yangzhou and Changzhou. However, judging from the land supply plan and the government's statement, the local governments of the two places have significantly slowed down the pace of land supply. For example, the supply of planned operating land in Yangzhou in 2024 is only 40% of the land transaction volume in 2023; In June 2024, Changzhou stated that in principle, it will no longer increase the supply of ordinary commercial residential land, and will no longer increase the supply of land for resettlement housing, and purchase commercial housing for expropriation and resettlement.

PART 04 Analysis of real estate investment prospects in various tiers of cities

1) First-tier cities: The permanent population has returned to positive growth, and the demand resilience is still the best with the support of high incomes

The permanent population of the four first-tier cities, which have slowed down significantly since 2020, will return to positive growth in 2023, especially in Shenzhen. In 2023, the city's permanent resident population at the end of the year will be 17,790,100, an increase of 128,300 over the end of the previous year, ranking first among the four first-tier cities, followed by Shanghai, which will also change the trend of permanent population decline in recent years, increasing to 24,874,500 in 2023, and an increase of 115,600 compared with the end of 2022 (24,758,900). This value is also the first time since the "13th Five-Year Plan" put forward the long-term population control target, the increase in the number of people exceeded 100,000. Coincidentally, at the end of 2023, the permanent population of Beijing will be 21.858 million, an increase of 15,000 from the end of the previous year. This is also the first increase in Beijing's population after "six consecutive declines". At the end of 2023, Guangzhou's permanent population, which decreased by 77,000 in 2022, increased to 18,827,000, an increase of 92,900 from 2022. It can be seen that the population attraction of first-tier cities is still strong.

Affected by the lowering of the threshold for settlement, the increase in the registered population in first-tier cities has increased significantly. In terms of specific data, from 2020 to 2023, the registered population of the four cities will show an upward trend year by year. Among them, Shenzhen, which has the lowest threshold for settlement, has the most significant increase, with an increase of 42.3, 27.1, and 227,000 in 2021, 2022, and 2023, respectively, with a cumulative increase of more than 920,000, ranking first among the four first-tier cities; It is followed by Guangzhou, with a cumulative increase of 715,000 registered population from 2020 to 2023, followed by Shanghai, with an increase of nearly 390,000 and Beijing with the smallest increase, about 124,000. From the perspective of the increase of registered population, the lower the educational threshold requirement, the largest increase in the registered population. And with the advancement of policy implementation, the increase in registered population has shown a slight downward trend. However, compared with before the relaxation of the settlement threshold, the growth of the registered population in first-tier cities has increased significantly in recent years.

In 2023, the average rate of new homes in the first-tier four cities will reach 43%, much higher than that in the second- and third-tier cities. Among them, Beijing and Shanghai performed the best, with the opening rate of more than 60%. It is worth noting that although the overall decentralization is relatively good, there are large differences within cities. Taking Shanghai as an example, a total of 32 projects entered the market in June, with a total of 7,497 units, with an overall de-conversion rate of 50%, and 13 projects with a de-conversion rate greater than 70%, accounting for 41%, and the overall de-escalation rebounded, but the two-level differentiation in the suburbs and regions is still obvious.

To sum up, the scale of market demand and market risk resistance in first-tier cities are still difficult to achieve in other energy cities, and the market is full of resilience. On the other hand, judging from the progress of land auctions in the first half of 2024, the first-tier cities of Beijing and Shanghai have both entered the top 3 list of transaction value, ranking first and third respectively, and Beijing has a turnover of 86 billion yuan, winning the first place. In terms of the popularity of local auctions, the popularity of local auctions in Shanghai is still among the highest in the country, with an average premium rate of up to 7% in the first half of 2024, which can be seen in the market popularity. Not only that, in the first land auction just completed in Shanghai after the cancellation of the 10% premium ceiling, the number of bidding rounds in Yangpu Pingliang and Changbai was as many as 60 and 79 rounds, and the premium rate of both places exceeded 15% (21% and 17%), and the land market heat has rebounded significantly, and real estate companies still have full confidence in high-quality land plots in first-tier cities. Therefore, the investment prospects of first-tier cities still rank first among cities of all energy levels in the country.

2) Second-tier cities: The growth rate of permanent population has rebounded, and cities such as Xiamen and Hefei still have a lot of room for growth

As the urbanization rate of second-tier cities has reached a high level and the future growth space is limited, urban research needs to pay more attention to short-term changes in the total resident population. In recent years, the strategy of "grabbing people" in hot first- and second-tier cities is changing, and the settlement policy relaxed in many places in the Yangtze River Delta and the Pearl River Delta has diluted academic qualifications and favored "skilled talents", such as Hangzhou and Nanjing have lowered the settlement threshold to junior college, and Hangzhou has introduced a new regulation of "buying a house to apply for settlement", and the settlement threshold has been significantly lowered, and the "talent competition" has gradually evolved into "population competition".

With the dual help of the relaxation of the threshold for settlement and the recovery of the industry, the permanent population of many economically strong cities has rebounded. Among the second-tier cities, Hefei ranks first in the country in terms of the number of new people in 2023, as high as 219,000, an increase that surpasses Zhengzhou, Hangzhou, Chengdu and other cities. Not only Hefei, but also second-tier cities with strong economic strength are still increasing their permanent population to varying degrees, such as Zhengzhou, Hangzhou, Chengdu, Shenzhen and Shanghai, where the permanent population has increased by more than 100,000, and the population agglomeration is more prominent.

In the context of declining fertility and accelerating aging, the national population has experienced negative growth for two consecutive years, and the national population will be 140967 million at the end of 2023, a decrease of 2.08 million from the end of the previous year. Under the limitation of the total amount, in the near future, most cities will face the reality of a slowdown or decline in population growth. For example, the permanent population of Chongqing, the largest city in mainland China, has shrunk significantly, with the permanent population falling to 31.9143 million in 2023, a decrease of 219,000, which is exactly the same as the increase in Hefei, the first city in terms of population increase in 2023. At the end of 2023, Changsha, the city with the largest permanent resident population increase, had a total permanent population of 10,513,100, an increase of 93,000 compared with 2022, and the increase fell to the sixth place in the country among second-tier cities.

At present, the per capita housing area of all residents on the mainland has exceeded 41 square meters, and the per capita number of housing units has also reached 1.2 units. However, the per capita housing area in urban areas is still less than 40 square meters, which still has a lot of room for development compared with developed countries in Europe and the United States. Among them, the per capita housing area of second-tier cities is only 41 square meters, and most cities still have some room for improvement.

Judging from the situation of 29 typical second-tier cities, 16 cities will have a per capita urban housing area of more than 41 square meters in 2023, among which Xi'an, Changsha, Zhengzhou, Chongqing and other central and western cities are particularly prominent, with a per capita housing area of more than 45 square meters, and there is relatively little room for further growth in the future. In contrast, the per capita housing area of the southeastern coastal, northeast and northwest cities is relatively low, mostly below 45 square meters. In particular, Xiamen, which has a high housing price level, has a per capita housing area of only 31 square meters, which is the lowest among second-tier cities, and there is more room for potential improvement.

To sum up, thanks to the development of the regional economy, most second-tier cities have obvious advantages in the agglomeration of floating population in the region, which also provides ample housing demand for most second-tier cities. From the perspective of the two indicators of comprehensive house-price-to-income ratio and per capita housing area, the per capita housing area of Hefei, Xiamen and other cities is less than 40 square meters, and the house-price-to-income ratio is less than 10 years, and the future development space for improved demand is the most promising. In terms of market performance in 2024, although the year-on-year performance of these cities is average, in horizontal comparison, the speed of de-commercialization of their new sales projects is still relatively good, and the de-commercialization cycle of commercial housing is also within a relatively healthy range.

3) Third- and fourth-tier cities: The Yangtze River Delta has performed well, and the property market transactions in Huai'an, Nantong and other cities are relatively active

In the first half of 2024, the transaction value of operating land in 300 cities across the country will only be 845.4 billion yuan, a year-on-year decrease of 36%. In addition, affected by the downward transmission of the new housing market, the proportion of transaction value in third- and fourth-tier cities has declined rapidly, accounting for only 44% of the amount in the first half of 2024, a decrease of 8 percentage points from 2023.

Among the third- and fourth-tier cities, the Yangtze River Delta region has performed relatively well, and among the top 10 cities in terms of economic aggregate, the Yangtze River Delta accounts for almost half of the country, and the GDP of cities such as Wuxi, Nantong, and Changzhou in 2023 will exceed one trillion yuan, followed by Xuzhou, Wenzhou, Shaoxing, Yangzhou, Yancheng, Jiaxing, Taizhou, Taizhou, Jinhua, Zhenjiang and Huai'an, and other 11 cities with a GDP of more than 500 billion yuan.

In terms of economic growth, 35 of the 41 cities outperformed the national growth rate (5.2%), and 7 cities exceeded 7%, all from Jiangsu and Zhejiang provinces, namely Lianyungang, Zhoushan, Shaoxing, Huai'an, Suqian, Lishui and Xuzhou. Among them, Lianyungang leads the way with an economic growth rate of 10.2%, and is the only city in the Yangtze River Delta with a double-digit growth rate among the 41 cities; Zhoushan ranked second with an economic growth rate of 8.2%; Shaoxing, Huai'an and Suqian tied for third place, with a growth rate of 7.8%. These cities have shown more resilient economic growth, mainly due to the rapid growth of the developed tertiary industry, and the relatively good development rate of the social sector, which has allowed the economic growth rate to be at the forefront of the cities.

Compared with the first- and second-tier cities, the most obvious feature of the third- and fourth-tier cities is that the per capita housing area of most cities has reached a high level, resulting in a period of slow growth for improvement, such as Xuzhou, Nantong, Dongguan, Zhongshan and other third-tier cities with a per capita housing area of more than 50 square meters, the growth space for improvement demand will be significantly limited. The pace of housing improvements will be significantly slower than in the previous decade. According to the historical development data of per capita housing area in 3,000 counties and cities in mainland China, when the per capita housing area is less than 45 square meters, the annual per capita housing area growth can still reach more than 1 square meter/year, but when it reaches more than 50 square meters, the annual increase in the demand for improved housing will rapidly drop to 0.6 square meters/year. For these cities, the future development of real estate projects should pay more attention to the regional differentiation within the city, focusing on the core areas and sectors with a high degree of urban population concentration and per capita housing area that still has room for development, especially for Quanzhou, which has a per capita housing area of more than 60 square meters.

Fortunately, with the exception of a few cities in the Pearl River Delta such as Foshan, Dongguan and Huizhou, the average urbanization rate of typical third-tier cities is still around 70%, and there is still some room for development in the "township-city" migration of permanent residents in the future. From the perspective of local real estate regulation, more attention should be paid to supporting the housing needs of the new urban population.

Attached: Indicator system and revision instructions

1. Urban real estate business environment index system

2. Revision Description: To adapt to the changing needs of the industry, increase the government environment, profit space and other indicator dimensions Since 2012, the "Urban Real Estate Development Prospect Ranking" released by CRIC Research Center has been released for 12 consecutive years. With the development and changes of the industry, the calculation indicators and models of the list over the years have also been adjusted accordingly, judging the differences in the competitiveness of cities from the research perspective of focusing on the scale of development, taking into account the turnover speed and profit risk, and providing decision-making reference for enterprises to adjust the existing layout and enter the city. In the early days of 2012-2015, the list included two dimensions: "development prospects" and "development risks". Since 2015, the industry scale has entered a period of rapid development, the "high turnover" model has become popular, and in the market environment of both volume and price, the long-term expected benefits brought by scale expansion greatly exceed the short-term profit risks of individual projects. In order to meet the development needs of the industry, since 2016, the city ranking has been reduced to a single ranking of "real estate development prospects". After 2020, in response to the acceleration of the pace of industry development, the indicator model has further expanded the number of original indicators for key cities with more comprehensive and timely data disclosure, and updated the yearbook data to the latest release of the bulletin data. As the industry has entered a period of scale adjustment in recent years, the overall business risk has risen rapidly, and the evaluation of the "certainty" of profitability has once again become the top priority of urban research. To this end, the "Urban Real Estate Development Prospect Ranking" will be optimized again into the "Urban Real Estate Business Environment Ranking", which further enriches the index system and reorganizes the evaluation logic on the basis of referring to the calculation ideas of the previous development risk ranking: adding a new dimension of government affairs environment, focusing on relevant indicators that reflect the regulatory ability of the competent authorities and the current status of governance. It includes four aspects: financing environment, government attention to the real estate industry, economic status of the real estate industry, and real estate market management. Upgrade market supply and demand to investment risk. Compared with the previous indicator system, the consideration of profit space and turnover speed has been further improved, and the secondary indicator "market competition" has been added to consider the competition between enterprises and projects. The original purchasing power is incorporated into the market capacity and the indicator system is streamlined. Considering that a large number of housing needs in various cities are undertaken by the second-hand housing market, compared with the indicator system of previous years, the proportion of per capita housing transaction volume has been increased. Optimize the original external factors into the fundamentals of the city. Referring to the relevant research results of Peking University and Wuhan University, it is included in the city's industry-wide business environment evaluation indicators.

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"2024 China Urban Real Estate Business Environment Ranking Evaluation".

-- Evaluation of Urban Real Estate Development Prospects》

(1) The list is released

1. China's top 50 cities in terms of urban real estate business environment

2. Top 50 cities in China's urban real estate investment prospects

(2) Indicator system and revised description

1. Urban real estate business environment index system

2. Revision Description: Adapt to the changing needs of the industry, and increase the indicator dimensions such as government affairs environment and profit margin

3. Interpretation of typical new indicators

(3) Interpretation of the list

1. Pattern: Among the northern cities, only Beijing ranks among the top 10, and the average ranking of cities in Jiangsu and Zhejiang provinces ranks among the top 50

2. Differentiation: The scale indicators of the first and second lines have significant advantages, and only a few of the third lines of the southeast coast rank among the forefront

3. Pace: It is more and more valuable to maintain a fast pace of development, and the average development cycle in Beijing is still only half a year

4. Supply: Reducing land supply to promote the balance of supply and demand, and local authorities will actively reduce the land supply plan for 2024

5. Scale: Under the target of destocking, land transactions in key cities are generally smaller than the scale of housing transactions

6. Demand: The scale of the industry has entered a period of adjustment, and population agglomeration will still support the development of demand in core cities

(4) Analysis of real estate investment prospects in various tiers

1. First-tier cities: The permanent population has returned to positive growth, and the demand resilience is still the best with the support of high income

2. Second-tier cities: The growth rate of permanent population has rebounded, and cities such as Xiamen and Hefei still have a large room for increment

3. Third- and fourth-tier cities: The Yangtze River Delta has performed well, and the property market transactions in Huai'an, Nantong and other cities are relatively active

(Note)

1. Classification of cities and description of data sources

2. Data processing and calculation

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