(Yicai Global) June 21 -- The four first-tier cities of Beijing, Shanghai, Shenzhen, and Guangzhou continue to be the key investment areas for China’s real estate developers, according to a new report by an industry research institute.

Hangzhou, capital of Zhejiang province, maintained its fifth position for the sixth straight year, the China Index Research Institute’s report on the attractiveness of real estate development investment in 297 cities showed today.

Chengdu, capital of Sichuan province; Nanjing, capital of Jiangsu province; Suzhou, Jiangsu’s largest economic city; Wuhan, capital of Hubei province; and Xi’an, capital of Shaanxi province, are the bottom five of the top 10, the report added.

Only six of the top 20 cities on the list are neither municipalities nor provincial capitals. They are: Shenzhen, Suzhou, as well as Ningbo (14th), Qingdao (15th), Foshan (19th), and Dongguan (20th). Except Qingdao, all are located in the Pearl River Delta or the Yangtze River Delta regions.

The cities are ranked according to their attractiveness to developers, taking into account indicators such as population, industry, transportation, local government debt ratio, foreign trade dependence, and the number of Top 500 companies.

The report suggests that as the population declines in the medium and long term, the total supply of new housing will inevitably fall. The differentiation of the real estate markets among cities will become more obvious, and builders will have more difficulty in choosing priority cities to invest in.

The report said that although property investment tends to slow, core first- and second-tier cities, as well as some third- and fourth-tier cities in the economically developed Yangtze River Delta and Pearl River Delta regions, still have outstanding investment potential for developers thanks to the exceptional capabilities in resource aggregation of these cities.

Editors: Tang Shihua, Peter Thomas