Editor's note:
Real estate and industrial chain in a changing situation
2023 is a year for the real estate market to continue to adjust. According to the monitoring of the China Index Research Institute, in 2023, the transaction area of new houses in key 100 cities will decrease by about 6% year-on-year, with 64 cities with new house prices falling from the previous year, while 99 cities with second-hand housing prices falling.
Affected by this, real estate peripheral industries such as home furnishings and building materials also performed sluggishly. In 2024, entering the second half of real estate, a new supply and demand relationship has been established, and high hopes are placed on accelerating the establishment of a new real estate development model. With policy support, the expectation of economic stabilization, and the improvement of home ownership, the market is expected to gradually bottom out and stabilize.
In 2023, the deep adjustment of the real estate market will continue.
Looking at the transaction situation throughout the year, data from the China Index Research Institute shows that in 2023, the sales area of new houses in key 100 cities will drop slightly by 6% year-on-year, of which there will be a year-end market in December, with a month-on-month increase of 19%;
Entering the second half of real estate, a new supply and demand relationship has been established. In the middle of 2023, the meeting of the Political Bureau of the Central Committee set the tone of "major changes in the relationship between supply and demand in the real estate market", which became a turning point in the policy, and timely adjustment and optimization of real estate policies kicked off a new round of curtains.
In 2024, there are high hopes for how to explore balance and stability under the new logic and accelerate the establishment of a new real estate development model.
Industry analysts believe that "housing security system, simultaneous rental and purchase, revitalization of stock, reform of the pre-sale system and land system, improvement of the financial and taxation supporting system" or an important direction of exploration of the new development model.
The property market will continue to bottom out in 2023
Looking back at the market volatility in 2023, the overall trend is "high in the front, low in the middle, and stable in the back".
At the beginning of 2023, there was a "small spring" market in the property market, and the sales area in January ~ April increased by 23% year-on-year. However, this period of recovery has its peculiarities, at that time, the pent-up housing demand was released intensively, which led to the rise of market transactions in a short period of time.
At that time, some real estate companies predicted the possibility of sluggish follow-up growth. A number of front-line sales leaders from different well-known real estate companies said in the 21st Century Business Herald survey that based on the overall consideration of the overall income expectations and the actual decision-making of consumers, they judged that the logic of this round of market changes has been different from the past, and the change factors go beyond the real estate industry itself, and the profound adjustment of the industry will affect the overall market trend in the long run.
In the middle of 2023, the volume and price of property market transactions have fallen, and the market performance has been sluggish. A regional head of a well-known real estate company once revealed: "After the rapid release of the pent-up purchasing power at the beginning of the year, in July, the first-line transaction data was basically 'cut in half', or even lower." "According to industry insiders, the root cause is concerns about economic growth and income expectations, and most people have cut back on home demand, and the wait-and-see mood is strong.
This continues to happen. In the second half of the year, data from the Bureau of Statistics showed that the sales of commercial housing turned from positive to negative, and the decline in both continued to expand. At the same time, the national real estate development investment continued to grow negatively, and the decline continued to expand. Among the 70 large and medium-sized cities included in the statistics, most of them have entered the channel of falling housing prices.
On July 24, 2023, the meeting of the Political Bureau of the CPC Central Committee made it clear that it is necessary to effectively prevent and resolve risks in key areas, adapt to the new situation of major changes in the relationship between supply and demand in the mainland real estate market, adjust and optimize real estate policies in a timely manner, and make good use of the policy toolbox according to the city's policies, so as to better meet the needs of residents for rigid and improved housing and promote the stable and healthy development of the real estate market. In this context, the restrictive policies introduced in the past market overheating stage have been gradually withdrawn or optimized.
Since August 2023, a number of core cities have continuously implemented the "mortgage subscription" and optimized the purchase and sale restriction policies. However, the effect of policy driving is relatively limited, and the sales area of key cities in September and October has rebounded slightly month-on-month, but the sustainability is insufficient, and there is still a large decline compared with the previous year.
Entering December 2023, affected by the continued easing of policies in hot cities, the year-end sprint performance of new houses, and the "price for volume" of second-hand houses, the sales pace accelerated, and the sales area of key cities increased by about 19% month-on-month.
According to the monitoring of the China Index Research Institute, in 2023, the transaction area of new houses in key 100 cities will decline by about 6% year-on-year, and the absolute scale will be the lowest level since 2016.
Housing price data, which reflects the deep water temperature of the property market, has not yet improved. According to data from the China Index Research Institute, in 2023, among the 100 cities it focuses on monitoring, 64 cities will see new house prices fall from the previous year, while 99 cities will see second-hand housing prices decline, and the number of cities with month-on-month declines in second-hand housing prices will exceed 90 cities for 7 consecutive months.
At the same time, the sales performance of key real estate companies has also been bleak. In 2023, the total sales of the top 100 real estate enterprises will be 6,279.10 billion yuan, a year-on-year decrease of 17.3%. Among them, there were 16 real estate enterprises with sales exceeding 100 billion yuan, a decrease of 4 over the same period of last year, and 116 real estate enterprises with sales of 10 billion yuan, a decrease of 14 over the same period of last year.
According to the calculation of the "Medium and Long-term Development Dynamic Model of China's Real Estate Industry", the China Index believes that in 2024, the national real estate market will show the characteristics of "there is still downward pressure on the sales scale, and the area of new construction and development investment may continue to fall", and under the neutral assumption, the sales area of commercial housing in the country may decline by 4.9% year-on-year;
Accelerate the construction of a new model of real estate development
Real estate analysts generally believe that the current adjustment of real estate should be switched from the "cycle theory" to the "transition theory", that is, the transformation from the first half to the second half, and from the old model to the new model.
The regulator's statement on the major changes in the relationship between supply and demand is a major judgment based on the economic and social development stage of the mainland and the development law of real estate itself. Ni Hong, Minister of Housing and Urban-Rural Development, recently said that the central government has made a series of important deployments and proposed to build a new model of real estate development, which is a fundamental policy to solve the problem of real estate development and promote the stable and healthy development of the real estate market.
Specific to the implementation level, Ni Hong emphasized that first of all, we must do a good job in the implementation of the "three major projects", that is, the planning and construction of affordable housing, the construction of public infrastructure for both ordinary and emergency purposes, and the transformation of urban villages. At the same time, we will implement the spirit of the Central Financial Work Conference, meet the reasonable financing needs of real estate enterprises with different ownership systems without discrimination, and promote a virtuous cycle of finance and real estate.
In 2023, the Central Economic Work Conference emphasized the importance of the "three major projects". In response to economic hot issues, the Central Finance Office also said that the "three major projects" are not only major livelihood projects to solve the people's urgent problems, but also conducive to driving real estate-related investment and consumption and stabilizing the macroeconomic market.
In the view of practitioners, the "three major projects" are expected to become an important starting point for stabilizing investment and promoting consumption in 2024, and the supporting policies related to the "three major projects" will also be accelerated to actively play a role in stabilizing investment.
According to the estimation of GF Securities, the contribution of the "three major projects" to the scale of real estate investment in 2024 is expected to be 0.93 trillion yuan, which will drive real estate investment by 7.8 percentage points, and is expected to become an important driving force for the further improvement of total demand in 2024.
At the local level, the implementation of the "three major projects" is being accelerated. In November 2023, Guangzhou issued the "Draft Regulations on the Transformation of Urban Villages", and recently, Shenzhen has started construction of 13 placement affordable housing projects, with a total of more than 10,000 units and a total investment of about 12.5 billion yuan, and the China Development Bank has recently landed the country's first placement affordable housing loan in Fuzhou.
In addition, according to the person in charge of the relevant departments and bureaus of the Ministry of Housing and Urban-Rural Development, most cities have submitted the construction plans and construction projects of affordable housing in 2024 as required, and the Ministry of Housing and Urban-Rural Development is working with relevant departments to urge the local government to implement the construction project to the specific construction plot, and at the same time do a good job in the follow-up project reserves. Among them, Shanghai, Jinan, Qingdao, Fuzhou, Changsha and many other cities have started a number of projects.
On January 2, the central bank reported that in December 2023, China Development Bank, Export-Import Bank, and Agricultural Bank of China added a net of PSL3500 billion yuan. Institutions generally believe that in the context of the "three major projects" being frequently mentioned by important meetings such as the Central Economic Work Conference, PSL, as a policy loan with a suitable term and cost, is expected to provide financial support for the "three major projects" and accelerate the construction progress of the "three major projects".
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