The first city of house price adjustment, the purchase restriction has been canceled!

Author: Yu Fei

​01

Changsha has fully lifted purchase restrictions

According to the plan, today I originally planned to release an analysis article on the Hangzhou property market, who would have thought that Changsha would make a big move halfway. Preview, Hangzhou tomorrow, Xi'an the day after tomorrow.

On April 18, the Changsha Municipal Bureau of Housing and Urban-Rural Development issued the "Notice on Supporting Residents to Purchase Improved Housing", proposing:

1. Those who buy a new house by "exchanging the old for the new" can enjoy the preferential down payment ratio and mortgage interest rate for the first house in accordance with the policy of "recognising the house but not recognizing the loan".

2. If you apply for a housing provident fund loan for the purchase of a new house, the maximum loan amount will be increased on the original basis.

3. The qualifications of home buyers will no longer be reviewed.

All three policies are measures to support real estate development.

The first is to cut interest rates. Trade-in, if you buy a new house, you can enjoy the loan policy for the first home. 20% down payment.

Second, the amount of provident fund loans has been raised.

According to the "Changsha Housing Provident Fund 2023 Annual Report" released by the Changsha Provident Fund Management Center, the maximum amount of personal provident fund loans in Changsha in 2023 is 700,000.

The third is to completely lift the purchase restriction.

This means that Changsha has implemented a seven-year-old purchase restriction policy and canceled it. The title of "pacesetter of regulation" that was once promoted to this no longer exists.

Since last year, Shenyang, Qingdao, Jinan, Nanjing, Suzhou, Hefei, Wuhan, Zhengzhou and other cities have fully lifted purchase restrictions.

Changsha has also made adjustments, but it has always retained a pair of bottoms and has not been completely stripped naked.

On September 22, 2023, Changsha City optimized the purchase restrictions of some real estate, clarifying that residents no longer need to provide proof of purchase when buying their first home in Changsha. On November 24 of the same year, Changsha clarified that if the area of a single commercial housing under the name of a resident family is less than 144 square meters, one improved housing (144 square meters or more) can be purchased.

This comprehensive cancellation means that no proof is required to buy a house, and there is no limit on the number of units to buy.

02

From regulating the pacesetter, to adjusting the first city

Changsha chose to fully lift the purchase restriction because its property market is under great pressure.

From the data level, CRIC data shows that in March this year, 250,000 square meters of new houses were sold in Changsha, an increase of 123% month-on-month and a year-on-year decrease of 71%, and a decrease of 38% and 49% respectively compared with the average of the third and fourth quarters of 2023. Cumulatively, in the first quarter of this year, Changsha sold 600,000 square meters of new houses, a year-on-year decrease of 68%.

Four words to describe, pull out the cool.

In terms of housing prices, data released by the National Bureau of Statistics showed that new homes in Changsha fell 0.5% month-on-month and rose 0.7% year-on-year in March.

The reason for the year-on-year increase is that the price of new homes in Changsha only began to fall in November last year, and Changsha, like Chengdu and Xi'an, has been rising against the trend when most central cities have fallen.

The logic of Changsha's previous rise lies in three points:

First, under the iron-fisted control policy, Changsha's housing prices have been well controlled, the bubble is relatively small, and its house-price-to-income ratio is the lowest among large and medium-sized cities.

Second, Changsha has always adopted a moderate upward approach, just like Chengdu. Therefore, these two cities did not begin to adjust until last year, and the first cities to adjust were those with large bubbles.

Third, under the strategy of strengthening the provincial capital, Changsha relies on the population that is siphoning the entire Hunan Province, so that its population growth in recent years has been good.

In 2021, the national population increase hit a record low, and in this context, Shenzhen and Guangzhou, which have always maintained a population increase of 500,000 or 600,000 in the past few years, have only increased by tens of thousands, while Changsha has increased by 178,500 in the same period, ranking among the top in the country.

In 2022, the country's population officially began to grow negatively, decreasing by 850,000 people, and in this context, the population increment of many central cities fell off a cliff, while Changsha bucked the trend, increasing by 181,300 people, ranking first in the country.

However, while Changsha is the largest in the country, the population of other cities in Hunan Province is decreasing.

The population of Hunan province has decreased by 180,000 people, and all other cities in Hunan except Changsha are decreasing. The permanent population of Hunan Province as a whole decreased by 180,000 in 2022.

Mapping: City Finance and Economics, Data: City Statistical Bureaus

In 2023, Changsha has not yet released population data. Hunan Province's permanent population will decrease by 360,000 in 2023.

Driven by the macro environment, the price of new houses in Changsha finally lowered its head at the end of last year and entered a continuous downward trend.

Interestingly, last year, cities represented by Changsha, Hefei, Dongguan, Guangzhou, etc., also created land kings, trying to take advantage of the atmosphere of land kings to change the situation.

At that time, this number said that the ideal is very plump, and the reality is very skinny. In today's environment, the discomfort can be stopped, and if you blindly speculate on high land prices, there is a high probability that it will be a bamboo basket to draw water.

Many of the land kings who were born during the bull in the property market are swallowing their own bitter fruits.

The data is the best proof that the housing prices in these cities have not stopped falling because of the emergence of the land king.

Compared with new houses, second-hand houses, which can better reflect the market trend, have taken the lead in adjustment, and Changsha's second-hand housing prices led the country in the month-on-month decline in March, becoming the first city to adjust.

How did the former pacesetter of regulation and control become the city that led the decline?

The cornerstone of the property market is population and industry, from the perspective of population, Changsha does not have any problems, but from the perspective of industry, there are big problems.

03

Changsha's industrial difficulties

Changsha is known as the capital of construction machinery, and the city's industrial label is heavy industry, with Sany Group, Zoomlion, Railway Construction Heavy Industry, and Sunward Intelligence, which are among the top 50 global machinery manufacturers.

With the support of these heavy industries, Changsha's economic growth rate in the past ten years has been very good.

However, with the weakening of the construction machinery industry in the past two years, Changsha's growth engine needs new blood to join.

The data shows that from the macro situation, the construction machinery industry will be in a period of downward adjustment in 2022, superimposed by factors such as the slowdown in macroeconomic growth, the epidemic and the insufficient operating rate of projects, the overall revenue of domestic construction machinery will decline from more than 900 billion yuan to 850 billion yuan.

In this context, in 2022, the total revenue of Sany Heavy Industry and Sunward Intelligent will be 80.822 billion yuan and 7.302 billion yuan respectively, a decrease of 24.37% and 35.99% respectively, and the net profit will be 4.405 billion yuan and -1.138 billion yuan respectively, a decrease of 64.26% and 463% respectively.

The profits and business of the two leading enterprises shrank, which directly triggered the output value of Changsha's construction machinery industry to dive.

In 2022, the total output value of large-scale enterprises in Changsha's construction machinery industry cluster will be 199 billion yuan, and this figure will exceed 280 billion yuan in 2021.

Note that the above refers to the construction machinery industry cluster. According to the 41 industrial categories divided by the Ministry of Industry and Information Technology, Changsha has only one 100 billion industry, that is, tobacco manufacturing.

According to the Changsha Municipal Bureau of Statistics, the operating income of the tobacco products industry in 2021 was 101.629 billion yuan, making it the only 100 billion yuan industry in Changsha.

Changsha also has 15 industries of 10 billion yuan. General equipment manufacturing, computer, communication and other electronic equipment manufacturing. The output value of the automobile manufacturing industry is more than 90 billion yuan, which is one of the three quasi-100 billion industries.

Graphics: City Finance and Economics, Data: Changsha Municipal Bureau of Statistics

Therefore, although Changsha is known as the "capital of construction machinery", the overall strength of the manufacturing industry is not high in the country. In 2022, the industrial added value will be 408.654 billion yuan, ranking 19th in the country.

Mapping: City Finance and Economics, Data: City Statistical Bureaus

Compared with the eastern hotspot cities, Changsha's industry focuses on machinery and heavy industry, and lacks emerging industries. This is a common feature of central cities in the Midwest.

In the face of the lack of emerging industries, Changsha has been emphasizing one word in the past two years, science and technology.

Last year, Changsha issued the "Ten Talent Policies for Changsha to Build a Global R&D Center City (Trial)", aiming at R&D institutions and R&D talents, "high-tech" leading talents, young R&D talents, etc., and providing corresponding subsidies and subsidies for those who meet the requirements.

Source: Changsha Municipal Government official website

As can be seen from the title of the document, Changsha aims to become a global R&D center city, which will be initially completed by 2035.

According to Times Finance, this is currently the only city in China that has shouted such a target positioning.

It can be seen how ambitious Changsha's goal is. At the same time, at the end of last year, the Hunan Provincial Government officially launched the Xiangjiang Science City, which carries the ambition of Changsha as a global R&D center city.

Xiangjiang Science City spreads along the north and south of the Xiangjiang River, spanning the two cities of Changsha and Xiangtan, surrounding the Changsha-Zhuzhou-Xiangtan Central Park, the Science and Technology City of Yuelu Mountain University in the north, and the Jiuhua Economic and Technological Development Zone in Xiangtan in the south. The planning area is 153.65 square kilometers, including 95.5 square kilometers in Changsha and 58.15 square kilometers in Xiangtan.

With a total land area of 2,813 acres and a total investment of 22.79 billion yuan, the construction is expected to be basically completed in 2026.

According to the plan, Xiangjiang Science City lays out the spatial structure of "one axis, two belts, six clusters, and eight districts", constructs an ecological pattern of "three belts, three centers and multiple corridors", and builds digital, informational, and intelligent urban public facilities and public spaces.

"One axis" is to rely on the science and technology innovation avenue (Wanjiali Road West Extension) to create an east-west extension of the main axis of science and technology.

The "two belts" are the formation of an innovation belt for the integration of science, education and industry along the Xiangjiang River, Tanzhou Avenue and Hexi Express, and a high-tech industrial innovation belt to the west of Changtan West Expressway and from the intelligent network area to Xiangtan University Town.

The "six clusters" are the intelligent manufacturing industry innovation zone, the science and education integration demonstration zone, the frontier science innovation zone, the industry-research integration innovation zone, the achievement transformation zone, and the strategic industry cluster.

The "eight areas" are the intelligent network film, the Guanyin Port Science and Technology Incubation Center, the Xiangjiang Laboratory (a large scientific device), the University Science and Technology Innovation Port, the Headquarters Innovation Center, the Xinglong Lake Innovation Center, the International Talent Town, and the Science and Technology Exhibition and Exchange Center.

The blueprint is well drawn, and whether it can be realized depends on Changsha's own.