The purchase restrictions have been fully lifted, and the efficacy of a dose is not as strong as before

Wu Xiaobo Channel

2024-05-10 10:50Posted on the official account of Zhejiang Hangzhou Bajiuling Cultural and Creative Co., Ltd

"The purchase restrictions are fully relaxed, and the effect of a strong drug is not as good as before."

Text / Ba Jiuling

History is like an old dog who can't learn new tricks, always repeating the same actions.

Since it first appeared in Beijing in April 2010, the "purchase restriction order" in the real estate market has become one of the elastic bands of property market regulation.

The last time it was "loosened" was in June 2014, when Hohhot fired the first shot to cancel the "purchase restrictions" in the property market, and a month later, 27 cities announced the lifting of purchase restrictions.

The effect was immediate, and throughout 2015, the number of cities where house prices rose more and more month by month.

In December 2015, the prices of newly built commercial housing and second-hand housing in Beijing, Shanghai, Guangzhou and Shenzhen increased by nearly or more than 10% year-on-year, and the price of newly built commercial housing and second-hand housing in Shenzhen increased by as much as 40% year-on-year.

In October 2016, 21 cities restarted the purchase restriction, which was another "follow-up" in various places, and in 2017, the "purchase restriction order" was also selected into the "People's Livelihood Hot Words List" released by the Chinese Academy of Social Sciences.

In 2024, the same plot will be staged again, with the sudden announcement of Hangzhou and Xi'an yesterday (May 9) that the two cities of Hangzhou and Xi'an will fully relax the purchase restrictions, and there are only 6 provinces or cities in the country that still retain housing purchase restrictions - in addition to the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, as well as Hainan Province and Tianjin, which are still in a state of partial relaxation of purchase restrictions.

So, the question is, can this "old trick" succeed?

At the end of April, the E-House Research Institute wrote in the "Hundred Cities Residential Inventory Report" that "the current residential inventory problem is significantly different from that of 2014", and they pointed out with data that the contradiction of the current inventory is not that real estate companies supply a lot of housing, but that the inventory digestion capacity has been at a low level.

In other words, the high inventory in 2014 was caused by the pressure to not buy a house, once the medicine of "canceling the purchase limit" was taken, the inventory area plummeted, and in 2024, it was caused by people not wanting to buy a house, and the curve in the figure was also twisted and pinched.

Therefore, ten years ago, loosening the rope could activate housing prices and boost the property market, and ten years later, loosening the rope may not work, and the medicinal properties have been greatly weakened.

But each region still has its own considerations.

On April 29, the Ministry of Natural Resources issued new regulations: "If the de-conversion period of commercial housing exceeds 36 months, the transfer of new commercial residential land shall be suspended, and at the same time, great efforts should be made to revitalize the stock until the de-conversion period of commercial housing falls below 36 months." ”

According to CRIC data, as of the end of April 2024, there are 52 cities in 128 cities across the country with a destocking cycle of more than 36 months, accounting for 40%.

Most of them are in third- and fourth-tier cities, including second-tier cities such as Harbin. There are also 60 cities between 18 (exclusive) and 36 months. Among them, the first-tier city of Beijing, and the second-tier cities of Shenyang, Changchun, Wuhan, Nanjing, Zhengzhou, Jinan, Xiamen, Qingdao and so on are also among them.

Therefore, it is better to talk than nothing, and "canceling purchase restrictions" has become a necessary move for most cities to shake the iron plate.

In addition, for some cities with little pressure to destock, although the cancellation of purchase restrictions will not go through the old road to support the take-off of housing prices, it can pave a flower road to attract talents.

For example, Hangzhou and Xi'an.

At the end of 2023, Hangzhou's permanent population was 12.522 million, an increase of 146,000 compared with 12.376 million at the end of 2022, and Xi'an's permanent population was 13.0782 million during the same period, an increase of 82,300 over the end of the previous year.

Real estate long-term population, this group of "new Hangzhou people" and "new Xi'an" potential housing demand, just with the cancellation of the purchase restriction order to be further activated.

In Hangzhou's new policy yesterday, there was a "buy a house and settle down", and the intention is very obvious.

However, in this way, similar measures are even more unfavorable to the destocking of the third and fourth lines.

So in addition to purchase restrictions, what are the more effective "new tricks" to stimulate the property market? When will the purchase restrictions be lifted in first-tier cities? Is now a good time to buy a home?

We also consulted some big heads, let's take a look.

To promote the recovery of the national property market, in addition to canceling various restrictive measures (purchase restrictions, loan restrictions, price restrictions, and sales restrictions), in the future policy, it is necessary to further reduce the reserve requirement and interest rates to reduce the burden on home buyers.

For example, cities such as Hangzhou and Wuhan have begun to allow second homes to enjoy preferential loans for first homes (provided that the first home is listed for sale, but there is no requirement to sell it), which is also relatively large, and can reduce the interest rate of second homes by at least 40 to 70 basis points. In addition, it is likely that the government's efforts to acquire existing housing stock may be increased.

Hangzhou, like Shanghai, is one of the very few cities in the country that still has a difference in the price of first-hand and second-hand houses. In Hangzhou, the actual transaction price in the market in many areas can no longer be sold at the limit price level set by administrative means; However, there are still many core areas where the price limit is far below the market price, and these limit orders can still continue to bring hot sales to the deserted property market.

Why didn't Hangzhou cancel the price limit? Probably because there is a concern, if the price limit is lifted, will there be fewer hot sales? If there are fewer hot sales, will the property market be colder? Based on this thinking, the "full cancellation of price limits" is still not on the agenda of Hangzhou.

The situation has changed. Relying on limit orders to maintain the hot sales phenomenon has greatly reduced the role of disk protection. When it comes to disc guards, it relies on the stimulation of these two things:

One is the hot sales phenomenon, and the other is the price ceiling. Now is the trough period of the property market, and the hot sales created by administrative intervention have almost no effect; What can drive the property market is the real hot sales and price ceiling formed by the market mechanism.

Finally, back to Hangzhou's property market policy, how effective will it be? Like last time, there will be a policy effect for a month or two.

Although Hangzhou is the first new first-tier city to choose to fully lift the purchase restrictions, this does not mean that its property market has the greatest downward pressure, but has chosen a more radical policy approach.

From last year to March this year, after the release of restrictions on second-hand housing, the heat of the market has increased significantly, but it should be emphasized here that it is "self-occupation demand", not investment demand.

In contrast, I expect that the full lifting of the current round of purchase restrictions will have a lasting effect on the market than the previous second-hand housing.

In fact, except for Beijing, Shanghai and Shenzhen, most cities are already "de facto unlimited purchases".

Although on May 9, Xi'an also announced a full lifting of purchase restrictions, in fact, it had only restricted purchases in the second ring area, but the proportion of new housing supply in the second ring area itself was very small; There is also Changsha, which was relaxed last year to the original restrictions that people can buy a set, but no outsiders will go to Changsha to buy multiple suites, so these restrictions are only "seemingly restricted", and do not actually have the effect of restricting purchases.

In my opinion, the signal of the full liberalization of purchase restrictions is more significant, and it will continue to release the determination of local governments to vigorously boost the property market and not allow the real estate market to continue to cool down.

From this perspective, there is no substantial difference in the lifting of purchase restrictions in new first-tier cities, including Xi'an, Hangzhou, Changsha, Chengdu, etc., and more differences will be reflected in the strength and rhythm of the introduction of incentive policies in the future.

As for the release of purchase restrictions in first-tier cities with greater signal significance, once implemented, it basically means a full withdrawal of restrictive policies, but the stability of the first-tier cities themselves is significantly better than the national average, so I think it is difficult to fully cancel the purchase restrictions this year, and it will be more hesitant.

For example, under the premise that Shanghai did not introduce a policy after the Spring Festival, the transaction volume of second-hand houses exceeded 20,000 units in March, and the high transaction volume itself also shows that the market demand is still relatively strong. Even in Shenzhen, which introduced policies in May, the original transaction volume of primary and second-hand houses in April significantly exceeded the level of the same period last year.

Regardless of whether the house price has fallen, the rise in transaction volume is good, indicating that the house price is gradually bottoming out, if the house price falls, and the transaction volume also falls, it is negative, indicating that the house price will continue to decline.

In addition, the effect of the introduction of policies in first-tier cities is to make the market more stable, and at the same time, it must also drive more second- and third-tier cities to gradually get out of the market trough. In all probability, the policy relaxation in first-tier cities this year will maintain a "slow" pace.

Finally, various real estate recovery policies will certainly play an important role, but the current recovery of the whole country cannot rely on the real estate policy alone.

After all, it does not make home buyers have better expectations for their future income, nor does it solve the job stability of more residents, which are important reference indicators for home buyers.

From the perspective of the seller group, the stability of market expectations is also the premise, especially at present, many sellers themselves are replacement groups, and after selling the house, it will become a house to buy, so the underlying logic remains unchanged.

Since the second half of 2021, the real estate market has entered a deep adjustment, and its downside risks have been rapidly transmitted to the financial system and local debt.

Starting from the 724 Politburo meeting in 2023, which made a judgment on the market that "there have been major changes in the relationship between supply and demand", the Central Economic Work Conference at the end of 2023 proposed that "it is necessary to coordinate and resolve (please note, resolve, no longer prevent and resolve) risks such as real estate, local debt, and small and medium-sized financial institutions", and for the first time, the three major risks of real estate risk, local debt, and small and medium-sized financial institutions are juxtaposed.

Specifically reflected in the first and second-tier cities, although there are large differences in the real estate market in various places, the last year, especially this year, has shown basically the same trend, that is, the downward trend has accelerated sharply.

This is the market background faced by Hangzhou, Xi'an and other places when they announced the full relaxation of purchase restrictions.

Of course, the more direct policy orientation of the "comprehensive liberalization of purchase restrictions" is the resolution of inventory proposed at the 430 Politburo meeting this year, at which it was emphasized that all localities "should study and digest the stock of real estate and optimize the policy measures for incremental housing".

From the perspective of the market as a whole, the biggest problem at the moment is, of course, supply and demand, that is, oversupply. To improve the relationship between supply and demand, it is necessary to reduce the numerator and increase the denominator, that is, to reduce supply and increase demand. From the perspective of supply, we believe that for areas with a relatively slow destocking rate and a relatively large inventory, reducing or even suspending land supply will help ease and repair the supply-demand relationship within a certain period of time, and will be more scientific and accurate for stabilizing the market.

In addition, an important feature of the real estate market is the anticipatory economy, which means that, on the one hand, the demand for real estate comes not only from actual demand, but also from the public's expectations and confidence in the future, and what determines expectations and confidence is to a greater extent people's perception of the economy (such as employment and income, etc.).

In this sense, we believe that stimulating real estate demand should be explored in a more "pragmatic" direction.

For example, in real estate transactions, especially second-hand housing transactions, we have been calling for a phased reduction and exemption of all second-hand housing transaction taxes. It is worth mentioning that the main authority of the preferential tax policy lies with the central government, including national and local taxes, and the local government may not have the right to decide.

As for the recent decline in housing prices in some cities, we believe that the biggest difference between the property market and the stock market is that as long as there is a transaction volume, as long as there is a sustainable transaction volume, confidence can gradually recover. Because this shows that there are a large number of people, who agree with the reshaped price system, and there are a large number of people who have entered the market with real money. Therefore, the increase in trading volume is positive, not negative. Even if the price is down, it is not bearish.

The author of this article | And the wind and the moon and a half | Editor-in-Charge | Xu Tao

Editor-in-Chief | He Mengfei | Image source | VCG

View original image 3.54M

• 

• 

• 

• 

• 

• 

• 

• 

•