Changsha Yihai Real Estate Co.,Ltd. Yingshang International Residence Pricing Strategy Study

The development of residence industrialization in China was initiated at a comparatively later time and it was several decades later than the western developed countries in this sense. Since 1979, China have been implementing the reform and opening up economic policy, and the nation has realized an impressively successful transformation from planned economy system to market economy system step by step. During that time, the residence gradually started its industrialization journey. The allocation of residence developed from substance in prominent to purchasing with currency. Basically China has realized the residence commercialization by the end of 20^th century.Since 1990, influenced by the rapid domestic economic growth, the housing investment in Changsha has been increasing quickly. The total investment has grown from 97 million Yuan in 1991 to 17．5 billion Yuan in 2005．By 2005, the total housing investment has accounted for 13．2% of the GDP of Changsha and it had a remarkable effect on increasing and encouraging the economic development.A research from Social Survey Institute of China found that 68．4% purchasers consider price as the most significant factor; it is obviously the core of the residence marketing operation; in the meantime, reasonable and effective pricing is always the difficulty that the developers and investors have to face.In consideration of the above situation, this study is to analyze the pricing of "Yingshang International" residential project of "Yihai Company".This project is a single building, which is typical enough for our research.In the progress of my studying for the pricing of the Yingshang International, I based on the market analysis. Chapter Two analyzes the historical and current situations of the Changsha regional market where the project is located. Chapter Three made a further analysis into Changsha GDP, population and the disposable yearly income per capita, and developed the empirical analysis about their relationship with the residence price in the city of Changsha. It concluded that the residence price is positively related to the three factors and worked out the regression equation among them. It also made a prognoses to the future residence price in Changsha.Furthermore, based on analyzing the macro-economy and Changsha's residence market, I gradually expounded and analyzed pricing of Yingshang International in either theory or practice. With regard to the pricing theory of residence, my opinion is that it consists of cost-oriented, demand-oriented, competitive-oriented and quantization pricing of comparable building. The specific strategies of pricing are mainly made up of the following: overall pricing, total marketing pricing and time-point pricing. At the pricing of Yingshang International Residence, I took cost-oriented and comparable pricing into the primary consideration, meanwhile, the internal conditions of YiHai and external conditions of Yingshang International is analyzed. After comprehensively comparing the cost, financial plan, project orientation and comparable price, my determination for the average price of Yingshang International Residence is 3,600 Yuan/m²．Moreover, based on the theories of vertical and horizontal pricing, the vertical and horizontal price difference of Yingshang International Residence was defined; as making decision for vertical difference, the 15^th floor(in the middle of the building) is selected as the datum floor, the price of which is 3,600 Yuan/m², and the margin coefficient of price difference between the adjacent floors is within 1%. After full consideration of market situation of Changsha's residence, the final vertical price difference is formulated. The second step is to define the horizontal price difference, the key points are the orientation, day lighting, privacy, view and structure. Each apartment design is overall evaluated and scored, and then the final price adjustment coefficient is obtained. The coefficient above mentioned is multiplied by vertical price difference of its floor, the results of which is the sale price of each apartment.By study the pricing strategies of Yingshang International, a reasonable pricing system and method came into shape in this article. It supplements the theory, and possesses a significance in guiding and utilization aspects to the practice.