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- Source/Night Deep Finance
- Author/Night Deep Finance
Introduction: The tide of relaxation of property market regulation has quietly set off, and the two major provincial capitals have shot at the same time in one day.
The two major cities of Hangzhou and Xi'an have announced the complete cancellation of property market purchase restrictions!
Up to now, in addition to the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, only Hainan Province and Tianjin are still in a state of partial relaxation of purchase restrictions.
Is the 15-year-old "era of purchase restrictions" in China's property market finally coming to an end?
01. The official announcement of the two places: "Hangzhou and Xi'an have completely canceled the property market purchase restrictions!" ”
Early in the morning of May 9, heavy news came from Hangzhou, Zhejiang, announcing the optimization and adjustment of real estate market control measures, the complete cancellation of housing purchase restrictions, and the purchase of a house can be settled.
Previously, Hangzhou has innovatively identified the "first house" in the scope of districts and counties (cities) [In October 2023, the new policy: during the implementation of "recognising the house but not recognising the loan", if the house is purchased within the scope of the purchase limit, only the housing situation of the buyer family in the district, county (city) where the purchased house is located will be verified], and the scope will be expanded to all districts, counties (cities) in the city.
Just a few hours after Hangzhou's blockbuster announcement, another provincial capital issued a notice.
At about 15 o'clock on May 9, Xi'an issued the "Notice on Further Promoting the Stable and Healthy Development of the Real Estate Market", completely canceling the housing purchase restrictions in Xi'an, and residents will no longer review the qualifications for purchasing new commercial housing and second-hand housing in the city.
Due to the suddenness of the lifting of purchase restrictions, the impact has been transmitted to the capital market. Affected by this news, on May 10, real estate stocks became the object of capital pursuit! Real estate stocks in the A-share and Hong Kong stock markets collectively moved.
Among them, Shimao Group, a real estate stock in Hong Kong stocks, once rose more than 90% intraday, and South China City once rose more than 70%. In terms of the A-share real estate sector, nearly 10 shares such as China Merchants Shekou and Binjiang Group rose by the limit, and Vanke A once rose by nearly 5%.
However, for ordinary citizens, the relaxation of the policy means that the threshold for buying a house is lowered, but although many intermediaries and industry insiders believe that the policy adjustment is very strong, it will take some time to transmit it to home buyers.
02, there are only 6 places left, is the era of purchase restrictions finally coming to an end?
In fact, Hangzhou and Xi'an are not alone in canceling purchase restrictions.
This wave of cancellation of purchase restrictions can be traced back to the end of 2022 at the earliest, and Dongguan and Foshan fired the first shot of the complete cancellation of purchase restrictions.
These two cities are already megacities, but they are not at a high administrative level and do not attract much attention.
Until July 24, 2023, the meeting of the Political Bureau of the Central Committee proposed that it is necessary to adapt to the new situation of major changes in the supply and demand relationship of the real estate market, adjust and optimize the real estate policy in a timely manner, and make good use of the policy toolbox according to the city's policies.
The relevant signals released by the meeting promoted the first wave of cancellation of purchase restrictions. In just one month, a total of 12 cities have completely canceled purchase restrictions, including 7 provincial capitals, including Nanjing, Jinan, Zhengzhou, Hefei, Wuhan and other provincial capitals with large economic scale, as well as Dalian and Qingdao, two non-provincial capital megacities, Ningbo, Wuxi and other economically strong cities.
According to the monitoring data of the China Index Research Institute, up to now, the provinces or cities that still retain housing purchase restrictions in the country, except for the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, only Hainan Province and Tianjin are still in a state of partial relaxation of purchase restrictions. This means that there are still six remaining regions in the country that still implement the purchase restriction policy.
So, as a landmark policy of real estate regulation in the mainland, the purchase restriction has been implemented for more than ten years, is it time to say goodbye to it?
From the current point of view, the relaxation of purchase restrictions is indeed the general trend. The relationship between supply and demand in the mainland real estate market has undergone major changes, and since last year, there was such a clear statement for the first time, the market form and development model of real estate are changing, and the way of regulating and controlling the real estate market is also actively adjusted. Not only purchase restrictions, but also loan restrictions, price restrictions, and sales restrictions, many of which have now been canceled.
However, I don't think the purchase restrictions will disappear completely. At present, there are still a small number of cities partially implementing the purchase restriction policy, and it should be noted that this is due to the serious differentiation of the mainland real estate market, and the urgent need for "city-specific policies" and "one city, one policy".
Cities with oversupply in the market and insufficient capacity can choose to cancel them completely, but because of the settlement policy in key cities, it will be a big trend to continue to fine-tune and dynamically adjust at present.
03. Can the property market go back to the past?
With the cancellation of purchase restrictions, will the property market pick up immediately?
According to past experience, the last time "loosened" was in June 2014, Hohhot fired the first shot to cancel the "purchase restrictions" in the property market that year, and a month later, 27 cities announced the release 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.
The question is, can this "old trick" still succeed?
If we take five cities, including Nanjing, Zhengzhou, Hefei, Xiamen, and Wuxi, as an observation sample, we can find that since the cancellation and relaxation of purchase restrictions in August 2023, housing prices in these cities have not recovered.
In terms of second-hand housing, the year-on-year change in second-hand housing prices in Zhengzhou, Nanjing, and Xiamen since 2023 is also in negative growth. In March this year, the year-on-year decline in second-hand housing in Zhengzhou, Nanjing and Xiamen reached 8.2%, 9.5% and 9.6% respectively.
It can be seen that there is not much hope for the relaxation of purchase restrictions.
So, why did the relaxation of purchase restrictions in core cities in the past cause a sharp rise in housing prices, but not this time? In the final analysis, residents' balance sheets have been severely damaged over the years, affecting everyone's ability to pay.
What to do?
In fact, the top priority at the moment is to restore residents' spending power and confidence. Based on the lessons learned from Japan in the 90s and the successful experience of China and the United States in 2008, it is necessary to repair the balance sheets of enterprises and households through fiscal expansion, such as issuing ultra-long-term treasury bonds to support new and old infrastructure projects, issuing consumption vouchers on a large scale, reducing taxes and fees, and subsidizing advanced technology enterprises, supplemented by QE to lower interest rates and inject currency.
So the way to restore confidence in the housing market is to ease purchase restrictions, lower interest rates, set up a housing bank to buy developers' inventory for affordable housing, and repair the balance sheets of households and businesses through unconventional fiscal and monetary policies.
The last question is, will you buy a house after Hangzhou and Xi'an cancel the purchase restrictions this time?
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