Source: Securities Daily
Reporter Du Yumeng
Trainee reporter Mao Yirong
During the past Qingming holiday (April 4 to 6), despite the fact that sales offices in many places launched more sincere preferential promotional activities and continued to introduce favorable policies for the property market, the sales side of the property market still showed a continuous pressure trend.
According to the monitoring data of Zhuge Data Research Center, during the Qingming holiday, 1,329 new commercial residential buildings were traded in key 10 cities, with an average daily transaction of 443 units, and since the Qingming holiday in 2023 is only 1 day, the total transaction volume of new commercial residential buildings this year will decrease by 39.32% compared with the same period in 2022.
Chen Wenjing, director of market research at the China Index Research Institute, said in an interview with the "Securities Daily" reporter that on the whole, the market sentiment in some cities during the Qingming holiday was slightly restored, such as Beijing, Qingdao, Zhengzhou and other places increased the number of visits driven by policies. Looking ahead, there is still a lot of room for local governments to optimize property market policies.
Dealing with sales pressure
New policies for the property market are frequent
Since the beginning of this year, the central and local governments have intensively introduced property market support policies.
On the one hand, in order to increase the support of financial institutions for the financing of real estate projects, in mid-January, the Ministry of Housing and Urban-Rural Development and the State Administration of Financial Supervision issued the "Notice on the Establishment of an Urban Real Estate Financing Coordination Mechanism", requiring cities at and above the local level to establish an urban real estate financing coordination mechanism. This move aims to further promote the stable and healthy development of the real estate market from the supply side and more accurately support the reasonable financing needs of real estate projects.
The "Securities Daily" reporter learned from the Ministry of Housing and Urban-Rural Development that at present, 31 provinces and the Xinjiang Production and Construction Corps have established a provincial-level real estate financing coordination mechanism, and all cities at and above the prefecture level (excluding municipalities directly under the Central Government) have established an urban real estate financing coordination mechanism, and put forward a "white list" of real estate projects that can be given financing support in batches and push them to commercial banks. According to the data, as of March 31, 1,979 of the "white list" projects pushed by various places have received a total of 469.03 billion yuan of bank credit, and 1,247 projects have received loans of 155.41 billion yuan.
On the other hand, in response to multiple challenges such as the continuous adjustment of the real estate market and the fact that buyers' confidence in "entering the market" has yet to be restored, many cities, including first-tier cities, have launched a new round of property market support policies.
Specifically, following the "relaxation" policy of purchase restrictions in first-tier cities, on March 26, Shenzhen abolished the "7090 policy" implemented since 2006, which means that the large size of the real estate will not be restricted in the future. On March 27, Beijing explicitly abolished the relevant documents stipulating that "neither spouse shall buy a house within three years of divorce". In addition, many places have increased the maximum amount of provident fund loans, increased the loan amount for new citizens and young people, and implemented the policy of "first withdraw and then lend". In addition, some regions have introduced deed tax subsidy policies and issued consumption vouchers for house purchases.
"Since the first quarter, most cities, including first-tier cities, have further liberalized demand-side restrictions, and some cities have also introduced incentives for house purchases. Against this backdrop, the real estate market has shown some positive changes. Ye Yindan, a researcher at the Bank of China Research Institute, told the Securities Daily that for example, the year-on-year decline in real estate investment has further narrowed, and at the same time, there have been some signs of activity in new and second-hand housing transactions.
According to the data of the China Index Research Institute, in the first quarter of this year, although the overall transaction scale of newly built commercial residential buildings in key 100 cities was at a low level in the same period in recent years, the transaction activity of the real estate market rebounded moderately after the Spring Festival. According to preliminary statistics, in the first quarter of 2024, the average monthly transaction area of newly built commercial residential buildings in key 100 cities will be 18.25 million square meters, a year-on-year decrease of about 40%. Judging from the data after the Spring Festival, some core cities have increased the activity of the new housing market driven by policy optimization, and under the low base in February, the transaction area of newly built commercial housing in key 100 cities in March doubled month-on-month, and the year-on-year decline narrowed significantly. On the whole, the current home buyers' income and housing price expectations have not fully recovered, and the overall market is still under pressure to adjust.
First-tier city policy
There is still room for optimization
As the vane of the property market regulation policy, under normal circumstances, in order to avoid overheating caused by the "relaxation" of the policy, the content and space for the optimization of the property market policy in the first-tier cities are relatively limited, and the implementation is tight. The industry has high expectations for the follow-up first-tier cities to continue to introduce property market support policies.
Taking Beijing as an example, statistics from the Beijing Municipal Commission of Housing and Urban-Rural Development show that in the first quarter of 2024, 33,056 second-hand houses and 7,092 new houses were sold in Beijing, compared with 45,815 second-hand houses and 11,765 new houses in the same period last year. It can be seen that in the first quarter of this year, the transaction volume of new and second-hand houses declined significantly. In addition, judging from the average daily transaction performance of newly built commercial residential buildings in Beijing during the Qingming holiday, data from the China Index Research Institute shows that the average daily transaction scale during the Qingming holiday this year is 5,700 square meters, far lower than the 19,700 square meters in 2023 and 10,100 square meters in 2022. Similar situations are observed in Shanghai, Shenzhen and Guangzhou.
"Judging from the current performance of the property market in first-tier cities, it is expected that there is room for further optimization of the policy in the second quarter. Song Hongwei, research director of Tongce Research Institute, said in an interview with the "Securities Daily" reporter that it is mainly reflected in three aspects: one is to further reduce the threshold for buying a house and expand the base of the home buyer, the second is to reduce the cost of buying a house, and the third is to accelerate urban renewal and the transformation of urban villages. It is expected that in the future, the "strict and tight" policy in the peripheral areas of first-tier cities may be completely abolished, and the mortgage interest rate for home purchases will be further reduced and the support of the provident fund policy will be increased.
It is worth noting that since April, Zhengzhou, Wuxi, Nanchang, Ganzhou and other places have successively launched the "old for new" policy or phased cancellation of the lower limit of the first home loan interest rate, aiming to further activate the demand for rigid and improved housing purchases.
Chen Wenjing said that in the short term, the "old for new" policy is conducive to promoting the linkage of new houses and second-hand houses, and is expected to increase the activity of the property market. At the same time, many places have issued plans to raise rental housing, and the acquisition of second-hand housing as a rental house in the future may be an important way. Overall, it is expected that more cities may participate in the "trade-in" in the future, promoting the release of demand for improved housing.
In Ye Yindan's view, on the whole, the intensity of real estate-related support policies will continue to increase in the second quarter, and the downward trend of supply and demand in the real estate market is expected to ease to a certain extent, but it will still take time for market confidence, expected repair and industry stabilization.