Sunac China, the country’s fourth-largest property developer by sales, recorded the highest average selling price – 15,200 yuan (US$2,264.9) per square metre – among China’s “Big Five” developers last year. According to data by JPMorgan, Sunac, which focuses mainly on large cities, beat China Vanke, the country’s second-largest developer by sales, by a whisker. The average selling price at Vanke was 15,032 yuan per square metre. Country Garden, China’s biggest developer by sales, reported an average sales price of 9,266 yuan per square metre, the cheapest among the Big Five. Among 22 major developers, it was China Jinmao Holdings that fetched the highest average selling price of 25,537 yuan per square metre last year. The company focuses on luxury residential homes in larger cities. The average selling prices reflected two groups within the sector. “One is present in small cities or counties, [such as the likes of] Country Garden, while the other is sharpening its focus on major cities with larger economic output, [such as the likes of] Sunac and Vanke,” said Yan Yuejin, research director at E-House China R&D Institute. More than 80 per cent of the 48.3 million sq metres of land Sunac bought last year was located in tier 1 and tier 2 cities, such as Beijing and neighbouring Tianjin. About 70 per cent of the 86.5 million sq metres that Country Garden acquired in 2018 is located in smaller cities such as Huizhou in Guangdong province. Beijing unlikely to loosen property price controls, says Sun Hongbin, boss of construction giant Sunac China Yeung Kwok Keung, Country Garden’s chairman, said during its results briefing last month the future of China’s property sector lay where thousands of migrant workers will settle down – in its smaller cities and counties. Migrant workers who quit farms for cities, will not go back to rural areas, and will try to bring their children and families to China’s cities. “However, they cannot afford homes in first or second tier cities. But they can afford homes sold for about 6,000 yuan per square metre in [smaller] counties,” said Yeung. Vanke and Sunac, on the other hand, underlined the large amounts of saleable land they hold in big cities during their earnings briefings. ‘Recovering confidence’: China property developer buys two sites in Beijing, Shanghai for US$1.8 billion Meanwhile, all companies agreed they were not optimistic about the year ahead. “Stabilising home prices is the government’s core pledge … any substantial relaxation of the current tight home price policies is impossible,” Sun Hongbin, Sunac’s chairman, said during its earning briefing on March 29. In a special letter to shareholders on March 25, Yu Liang, the chairman of Vanke, said a bull run in China’s property market was over. The average selling price at Sunac last year was 7 per cent lower than in 2017, which stood at 16,380 yuan per square metre, while Vanke and Country Garden reported only 2 per cent year-on-year increases amid a countrywide home prices limiting campaign. “We expect localised fine-tuning policies to continue, but the main focus will still be on stabilising the national property market,” rating agency Moody’s said on Monday. “National contracted sales growth to continue to slow down over the next 12 months, driven by lower sales volume as a result of softer demand than 2018 and 2017.” In a working report presented by Chinese Premier Li Keqiang at the National People's Congress in Beijing last month, the government reiterated its commitment to the steady development of the country’s property market. The year has got off to a dismal start for Chinese developers. Evergrande Group reported its contracted sales fell by 42.5 per cent year-on-year during the first two months of 2019, its worst result in three years. Vanke reported a decline of 11 per cent in sales and Country Garden said sales were down 11.3 per cent. The industry expects transaction volumes to shrink by 10 per cent for the whole year.