House prices are difficult to bottom out, but the upward momentum has bottomed out
Perhaps, many people read the title of the article and will find it very strange, very difficult to understand, and even contradictory. Since the upward momentum of house prices has bottomed out, why can't we bottom out? Why is there such a contradiction?
Zhongxin Jingwei reported on December 7 that the "November 2021 National 40 Cities New Commodity Residential Transaction Report" released by the E-House Real Estate Research Institute on the 6th showed that the transaction volume of new houses in 40 cities in November hit a new low in nearly 10 years, and it is expected to continue to bottom out in the short term.
It is understood that the 40 cities include Beijing, Shanghai, Guangzhou and Shenzhen, 4 first-tier cities; 18 second-tier cities such as Suzhou, Fuzhou, Nanjing and Qingdao; and 18 third- and fourth-tier cities such as Yangzhou, Dongguan, Wenzhou and Yueyang. These cities are representative of different types of cities, can represent the basic changes of the type of city, and the surveyed data can also provide a certain reference for decision-making.
So, why do I want to use a seemingly contradictory title, the reason is that the current practice in many places has promoted the existence of this contradictory pattern. Because, judging from the situation of the report, the house price has indeed reached a very important juncture, the transaction volume has reached a new low, most of the developers have a tight capital chain, the buyers are becoming more and more rational, and although the policy has made some adjustments in the case of Evergrande's risks, it is not a comprehensive relaxation, nor will it be fully relaxed, but it will be adjusted in some aspects on the basis of adhering to the positioning of "housing and not speculation". In such a situation, house prices should fall, and continue to explore the bottom, and finally find a balance point at the bottom, find a foothold that buyers can accept, and achieve the stability of house prices.
The key is that local governments do not have such an idea, they can accept the rise in house prices without restriction, just like in the past, house prices have risen several times, the most places have risen more than ten times, they are not surprised, nor have they taken the initiative to introduce policies to control the rise in house prices, there is no restriction on the rise in house prices, but instead enjoy the pleasure brought by the rise in land prices, a large number of land transfer fees, so that they can get more financial dominance, construction of government performance projects, image projects. When the house price has an inflection point and needs to fall, it will begin to introduce a price limit policy city after city, clearly requiring that the price cannot be reduced or can only be reduced within a small range, helping developers maintain house prices. In such a situation, will house prices still fall? Can you still explore the bottom? The fact that house prices cannot bottom out means that the road to falling house prices is blocked by local governments.
As everyone knows, this move by local governments is equivalent to speeding up the death of developers. Because, for developers, the most urgent thing at the moment is to raise funds and alleviate the contradiction of the capital chain. In the absence of a significant relaxation of credit funds by banks and the opening of the door to lending to developers again, only by selling houses at a reduced price can the capital chain be ensured. Otherwise, a considerable number of developers' capital chains will be broken. Once the capital chain is broken, the risk of the real estate market will erupt.
However, the local government did not think of this layer, and is still irrationally controlling the decline in house prices. Or think of it, but do not want to let the house price fall, but also want to eat real estate meals, live a good life of land transfer fees, and ignore the majority of residents' attitude to buy a house has undergone great changes, has become more and more rational, as long as the house price does not fall, choose to wait. Improved housing, in particular, will not rush to sell. For developers, there are fewer and fewer conditions to wait, and more and more is the tightening of the capital chain.
It must be said that the local government's price limit policy is a favor for developers. At this moment, most of the developers are really unwilling to resist the house price anymore, and they can't resist it, and the local government has to limit the price, which is not equivalent to pushing the developer to death? How nice it is to keep house prices falling moderately and interact with home buyers. Otherwise, the situation in the real estate market will really become more and more severe. If Evergrande could withdraw funds through house sales and so on as soon as possible, perhaps such a phenomenon would not have occurred. The key is that the developer must die to carry the house price, and the result of the dead house price is that even Evergrande can't hold up, and the Guangdong Provincial Government must send a working group to help the work.
Therefore, in the face of the local government's stubborn behavior of housing prices, we hope not to continue to do so, which is not good for the local government. Once a risk arises in a development enterprise, the local government will become the one responsible and must help the developer deal with the risk. Instead of this, why not let the developer sell the house at a reduced price and withdraw funds? Why help developers die on house prices? If you really care about developers, don't limit price cuts, really limit them, don't let house prices fall sharply, and avoid bringing new contradictions and problems. Others should be arranged by the audience market to let the invisible hand play a role, and the role of the visible hand should be placed on building more affordable housing, especially affordable rental housing.
The Politburo meeting demanded that we should promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of home buyers, and promote the healthy development and virtuous cycle of the real estate industry. This also further clarifies that the central government is supporting the commercial housing market to better meet the reasonable housing needs of home buyers, and restricting the decline in house prices is actually restricting residents from meeting reasonable housing needs, which must be corrected and restricted.