The NDRC investigates the signal transmitted by the Changsha property market: maintain the determination of regulation and control to prevent potential risks

According to the news released by the Price Monitoring Center of the National Development and Reform Commission on the official website on October 20, in order to understand the changes in the real estate market in various places since the beginning of this year, as well as the implementation effect of relevant regulatory policies, on October 19, Deputy Director Liu Wuxing led a team to Changsha City, Hunan Province, to carry out research and discussion.

Analysts believe that the price monitoring center of the National Development and Reform Commission went to Changsha to investigate, sending some subtle signals. Among them, it is worth noting that the NDRC, while emphasizing the maintenance of regulatory determination, also mentioned the need to prevent enterprises and project operations.

Liu Wuxing pointed out in the survey that the real estate industry is an important part of the national economy and is closely related to the lives of residents. In recent years, Changsha has achieved remarkable results in implementing the requirements of the central real estate regulation and control, adhering to the principle of "housing and not speculation", continuing to stabilize land prices, stabilizing house prices, and stabilizing expectations, effectively preventing and resolving potential risks, and promoting the stable and healthy development of the real estate market.

It further said that it is necessary to continue to implement the requirements of "housing and not speculation", maintain the determination of regulation and control, improve the long-term mechanism, strengthen market monitoring, especially pay close attention to some enterprise and project operation problems, put risk prevention in the first place, and maintain the stable and healthy development of the real estate market.

"Recently, the market has changed greatly, and for the direction of real estate regulation, the research and talk of the National Development and Reform Commission has conveyed some information. Judging from the situation of the Changsha property market, the implementation of regulation and control is relatively in place, and the NDRC's choice of Changsha as a research site also has its deep meaning. An analyst at a real estate agency in Shanghai said.

According to the third quarter of the market monitoring data of the Middle Finger Institute, in the first three quarters of 2021, a total of 21 cities in the second-tier cities in the country narrowed or turned down from the second quarter, accounting for nearly 60%, Changsha, Wuxi and other cities, the price increase of new houses narrowed by more than 1 percentage point compared with the second quarter.

However, while the market is turning cold, due to the obstruction of financing and sales, many developers have fallen into financial difficulties, and some projects have been stopped, resulting in delivery problems, and market confidence has been greatly affected.

The emergence of new problems in the real estate market has aroused great concern from relevant ministries and commissions. Before the Price Monitoring Center of the National Development and Reform Commission went to Changsha to investigate, the central bank released positive signals for real estate financing.

On October 15, Zou Lan, director of the Financial Market Department of the Central Bank of China, pointed out at the press conference on financial statistics in the third quarter that the People's Bank of China and the Banking and Insurance Regulatory Commission have held a real estate finance work forum at the end of September to guide major banks to accurately grasp and implement the prudent management system of real estate finance, maintain the stable and orderly delivery of real estate credit, and maintain the stable and healthy development of the real estate market.

Zou Lan also made it clear at the press conference that evergrande risk spillover to the financial industry is controllable, and Evergrande's outbreak risk is caused by poor management in recent years and failure to operate prudently according to changes in the market situation. This shows that enterprises should first practice their internal strength, prevent and eliminate risks from within, and have strong expectations for the relaxation of regulation and control, which may not be beneficial to themselves. A person from the market department of a medium-sized housing enterprise told reporters.

Lu Wenxi, senior research manager of Shanghai Zhongyuan Real Estate, believes that from a multi-faceted point of view, the regulation of the property market will not be greatly relaxed. In the process of the market turning cold, the mentality of home buyers is also changing, and the wait-and-see atmosphere is gradually intensifying, and housing enterprises should be prepared for "winter".