Before the Politburo made it clear, and then there were Tianjin, Beijing to varying degrees of relaxation of purchase restrictions, the May Day holiday 5 days have not passed, the "land father-in-law" Ministry of Natural Resources issued a "notice" to reduce the supply of land.
In fact, from the perspective that houses are commodities, reducing supply and increasing purchasing power can indeed reconstruct the supply and demand relationship of the property market and promote the property market.
However, if what really happened was said so easily in a few words like mine, then the Ministry of Natural Resources, the "father-in-law of the land", would not have issued a second document on the same issue after one year.
At this point in the article, some friends may ask: Isn't the land father-in-law the Ministry of Land and Resources, how did it become the Ministry of Natural Resources?
Here's what it looks like -
In 2018, the State Council's institutional reform plan specified that the Ministry of Land and Resources was renamed the Ministry of Natural Resources.
The Ministry of Land and Resources is responsible for the "natural resources" that we ordinary people understand, including but not limited to land, minerals, forests, grasslands, wetlands, water, oceans and other natural resource assets.
Anyway, I understand that all natural resources planning, surveying and mapping, rights confirmation, and draft laws and regulations are under the control of this department.
When you understand the function of the Ministry of Natural Resources as the landlord of land, you can also understand what the Ministry of Natural Resources means for land supply.
It means that the total amount of land supply in the country is "switched" and "valves" in the Ministry of Natural Resources!
Old fans who often read my articles should remember that when I was writing about the Qingdao property market, I raised a question:
Based on the requirements of the Ministry of Natural Resources, cities with an inventory removal period of more than 36 months need to stop supplying land, but the Ministry of Land and Resources has not clarified the standards and relevant statistical standards for inventory.
In other words, only the general direction has no granularity!
Everyone also knows how much local cities are dependent on land finance.
Therefore, at the end of 2022, the Ministry of Natural Resources' request for local cities to "reduce land supply" has basically become "persuasion".
Come, let me show you the expression of the first "Notice" issued by the Ministry of Natural Resources in December 2022, and you will understand why I said "it is persuasion" instead of a mandatory requirement.
I won't interpret the specific content of this document one by one, but you can see that the words "total reference", "should" and "compression" in the "Notice" were issued for the first time.
Judging from the expression of these words, it is clear that it is not a very tough attitude.
Because of this, although the annual land auctions in 2023 will indeed decrease compared with 2022, it is not that local cities are particularly active in reducing land auctions, but because of the cold property market, real estate companies have reduced land auctions.
Therefore, judging from the data chart of urban supply and land transactions, the land supply is still greater than the real market demand.
In this context,
Although cities have indeed reduced land supply from the perspective of data, the results of urban supply and demand are not ideal.
Why isn't it ideal?
There are three reasons for this.
Everyone should understand that commercial housing includes office buildings, shops and other product types, but in the actual statistics, this kind of statistics, known as "generalized inventory", is not much concerned.
People pay more attention to the "narrow inventory", which is what we often call "residential inventory".
In this context, in 2023, 1.25 billion square meters of residential land will be supplied, while 15,000 commercial and office land will be supplied, with a total planned construction area of 470 million square meters;
In other words, the supply of commercial and office land has reached almost one-third of the residential area.
Why is there such a high proportion of commercial and office classes?
Because from the perspective of local cities, there are real difficulties in choosing.
Local cities need to control the proportion of "housing" supply so that the market is "less than demand" as much as possible.
However, at the same time, due to the pressure of land finance, it is necessary to have a land supply of commercial and office products in order to increase the source of local urban finance and taxation.
Come, let's take a look at the content of the first "Notice" to make it clear, why I said that the Ministry of Natural Resources' request is not direct.
Original text [In which the area of unfinished residential land that has been supplied exceeds, the scale of the plan shall be strictly reduced until the land supply is suspended.] ]
In other words, the granularity of policy requirements is not clear.
In response to this policy in the market, the 36-month and 18-month inventory removal cycles converted are the understanding of the market.
As of February 2024, China's national commercial housing inventory (including residential buildings, office buildings, shops, etc.) was 759.69 million square meters, a year-on-year increase of 15.9%.
That is to say, although the Ministry of Natural Resources issued the "Notice" to mention that local cities adjust the land supply, but from the results of the supply and demand side, the first "Notice" did not play a strong "restraint" role!
Therefore, the Ministry of Natural Resources has refined the content of the first version of the "Notice" on May 1, the first day of the May Day holiday in 2024
How to take out a loan to buy a house, and how to understand the debt behavior of buying a house with a mortgage? You can read the article "Buy a house like this, earn an extra 2 million (3)"
02
On May 1, 2024, the Ministry of Natural Resources promulgated the Notice on Doing a Good Job in the Supply of Residential Land in 2024
Throughout the whole text, in a nutshell, there are two requirements:
1. Do not supply land for more than 36 months of inventory removal cycle;
2. Cities with an inventory depletion cycle of 18 months to 36 months need to follow the principle of "how much to revitalize, how much to supply";
Because 18 months is the warning line, that is, the cities whose inventory exceeds the warning line can only be "replaced" and cannot be added.
At this point in the article, I would like to briefly explain to you why the Ministry of Natural Resources' "Notice" is "revitalizing" how much inventory, and why not use the word "sell"?
Because of the current amount of inventory, it is difficult to reverse the relationship between supply and demand in accordance with the market policy demand, so it must be the local city "group purchase leasing", "directional purchase", "open stock real debt" and other ways to digest the inventory.
What does this mean?
It shows that the supply and demand relationship in local cities has not reached the "benign" 18 months, and no new land supply should be added.
What does this mean?
Within 12 months of the inventory removal cycle, it is obvious that "supply is less than demand", that is, it is difficult to find a house;
14 to 16 months is hot in the core area and cold in the periphery, that is, the market is differentiated.
Therefore, in accordance with the requirements of the second draft of the "Notice" of the Ministry of Natural Resources, land auctions in cities across the country will enter a shrinking supply, so as to return the property market to the situation of "one house is hard to find".
To be honest, I'm not surprised at all by this Notice. First, when I analyzed the relationship between supply and demand in local cities, I said that the first version of the "Notice" lacked granularity;
Second, adjusting the relationship between supply and demand and reconstructing the market situation is the fastest way to stabilize the property market.
So, what will happen to the property market in 2024, the recommended article "The comprehensive rescue is opened, will the property market in 2024 repeat the surge in 2015?"
03
Finally, a few points.
I would like to remind you that it is very important to make this point:
Once your city is also compressing the land supply plan or suspending the land supply, it means that the market supply and demand relationship is adjusting.
Because the population decline and graduate employment rate often mentioned by short-sellers, these all point to the problem of the demand side;
The good things that the bulls often say, including reducing the down payment, lowering the interest rate, and not restricting the purchase, etc., also point to the valve that regulates the demand side, and allows more buyers to "squeeze" into the purchase ranks through the 'regulating valve', thereby increasing the base of the demand side.
These views and measures, whether short or long, are just a game around supply and demand.
When I analyzed the property markets in Shenzhen, Xiamen, Qingdao and Shanghai, I told you that with the "immunity" of the demand side bailout, the adjustment around the supply side will become more and more intense in the future, until the supply and demand relationship between the first-tier and strong second-tier cities reaches a balance.
What is balance? The minimum limit should also be a differentiation market with hot at the core and cold at the periphery.
I expect that in May, there will be measures such as RRR and interest rate cuts, which will once again support the stock market and property market;
In addition, with the relaxation of purchase restrictions in high-energy cities such as Beijing, Tianjin, Chengdu, and Nanjing, Shenzhen, Guangzhou, and Shanghai will follow, with the only difference being "streaking" and "three points"
It is inevitable that the amount of land auctions in local cities will shrink. In this context, local cities will definitely launch core land plots, push up land prices, and further ensure and increase the price of core assets!