Recently, a number of real estate enterprises have announced their January 2014 sales figures. In the cold-spring off-season, the sales data of many large real estate enterprises still showed significant increases, and industry concentration rose as expected. On the 10th, Beijing Capital Land announced that its total sellable inventory for the year is expected to exceed 4 million square meters, with an annual sales target of more than 28 billion yuan. Wanda said it will strive this year to join the Fortune Global 500 and become the world's largest real estate enterprise. Zhang Dawei, chief analyst at Centaline Property, told reporters that in addition to benchmark real estate enterprises steadily raising their targets, the annual targets of many large and medium-sized real estate enterprises have all risen by 40%, but the decline in average profit places higher professional demands on real estate enterprises, and competition is bound to intensify.

 

　　Large Real Estate Enterprises' January Performance Relies on "Past Gains"

 

　　Many large real estate enterprises posted impressive January sales performance. But it is worth noting that after completing their sales targets last year, the accumulated inventory was included in the January statistics, making the books look relatively "good" in the traditionally slack January season.

 

　　Taking leading real estate enterprise Vanke as an example, its January sales reached as high as 27.7 billion yuan, prompting industry observers to exclaim that this was on pace for "200 billion for the full year." In fact, Vanke's launch volume in January was not high. However, since the end of last year it had accumulated about 35 billion yuan in subscribed-but-not-yet-contracted resources, which are expected to be gradually injected into the sales performance statement during the first quarter of this year.

 

　　Country Garden, which surged into the "100 Billion Club" last year, also "overtook" in the slack January season, with sales of 17.67 billion yuan, achieving rapid growth of 140%.

 

　　A reporter interviewed many large developers in South China and found that almost all first-tier real estate enterprises currently adopt a high-turnover model, strongly promoting rapid project launches and rapid sales, and implementing product and management standardization. According to Centaline Property statistics, within the next few years, the industry's average profit margin will decline by about 1 to 2 percentage points each year. Under such requirements, capital safety and large-scale replication in the industry are almost unavoidable.

 

　　"In the 2014 real estate market, the overall trend will be steady with slight upward movement, and there will be some structural changes." Liu Xiaoguang, chairman of Beijing Capital Land, analyzed that first-tier cities, relatively high-value second- and third-tier cities, and second- and third-tier cities within major metropolitan circles will grow steadily.

 

　　What is worrisome is when the real estate industry's hard-to-satisfy demand for high-speed growth will come to an end.

 

　　A Centaline Property report predicts that the explosive increases of the past few years will pause, the decline in average profit will place higher professional demands on real estate enterprises, and competition among real estate enterprises may become increasingly intense.