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It is expected that supply and demand will continue to be low in August, the policy effect will be decreasing, and the upward momentum of transactions will be insufficient.
◎ Text / CRIC Research Center
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In July, the supply and demand of new homes were weak, and the absolute volume was the lowest level of the year (only slightly higher than that of January and February at the beginning of the year), and the second-hand housing transactions weakened, but the month-on-month decline was smaller than that of new houses, and it still increased by 31% year-on-year. The scale of land transactions fell, with a year-on-year decline of more than 30%, but the average premium rate increased by 0.6pcts to 3.8%.
01New supply
24% month-on-month decrease
The first line fell significantly, and the reverse market of Tianjin, Han, Jiyu and Chongqing increased slightly
In July, the scale of supply fell steadily, with 30 key cities adding 8.04 million square meters, down 24% month-on-month and 16% year-on-year, with the absolute volume being the lowest level of the year, only slightly higher than the level of January-February at the beginning of the year, down 23% from the average monthly rate in the second quarter, and the cumulative year-on-year decline in the first seven months was 31%.
The first-tier supply has dropped significantly, and the month-on-month decline is significantly higher than that of the second- and third-tier. The overall estimated supply area of the four first-tier cities is 1.42 million square meters, down 37% quarter-on-quarter, down 23% year-on-year, and down 26% from the monthly average level in the second quarter. Only one city in Beijing continued to increase year-on-year, and the cumulative year-on-year decline narrowed to 7%, while the remaining three cities all fell year-on-year, and the supply was slightly sluggish. Taking Shanghai as an example, affected by high temperatures, the pace of real estate companies is not high, with only 7 plates opening or additional launches, and less than 2,000 houses entering the market. The supply of second- and third-tier cities decreased steadily month-on-month, Tianjin, Wuhan, Jinan, Chongqing, Huizhou, Changzhou and other cities increased month-on-month, and Xi'an, Hangzhou, Changsha and Foshan continued to decline month-on-month but were still better than the same period last year. The total supply of 26 key second- and third-tier cities was 6.62 million square meters, down 20% month-on-month, down 14% year-on-year, and the cumulative year-on-year decrease was 33%. From the perspective of changes, it is roughly divided into the following categories: first, a few cities such as Zhengzhou and Xuzhou ushered in a phased increase this month due to the low base of last month, and increased year-on-year; Second, some cities such as Tianjin, Wuhan, Jinan, Chongqing, Huizhou, and Changzhou increased month-on-month, but still less than the same period last year; Third, Xi'an, Hangzhou, Changsha, Foshan, etc., due to the volume in the middle of the year, fell month-on-month, but better than the same period last year. Fourth, most cities fell seasonally, with a year-on-year decline. It is worth noting that among the second- and third-tier cities, the cumulative year-on-year decline in five cities, including Chengdu, Xi'an, Zhengzhou, Wuxi, and Zhuhai, has narrowed to less than 2%, and the overall supply constraints have been eased.
02 New home transactions fell by 3% to reach the low point of the year
The effect of policies such as Beijing, Shanghai, Shenzhen and Hangzhou is rapidly declining
In July, due to the passing of the mid-year sprint season, the marketing efforts of real estate companies in most cities declined, the promotion efforts weakened + the discount efforts were recovered, and the high level of transactions fell to a slightly higher level than the level of January and February at the beginning of the year. According to CRIC monitoring data, the overall transaction volume of 30 key cities in July was 10.09 million square meters, down 29% month-on-month, down 11% year-on-year, down 16% compared with the average value in the second quarter, and down 36% year-on-year in the first seven months.
In terms of energy levels, the four front-line lines decreased by 24% quarter-on-quarter, 4% year-on-year, 5% month-on-month compared with the second quarter, and 29% year-on-year year-on-year. The four first-tier cities in Beijing, Shanghai, Guangzhou and Shenzhen all fell to varying degrees from the previous quarter, and the new policy of unbundling the "four restrictions" has a decreasing effect on the market, with only Guangzhou increasing year-on-year, which is basically the same as the monthly average in the second quarter. The transaction volume in second- and third-tier cities decreased by 29% month-on-month, slightly higher than that in first-tier cities, with a year-on-year decrease of 13% and a cumulative year-on-year decrease of 37%. Cities can be divided into the following categories: (1) Xi'an, Chengdu and other markets have slightly decreased in popularity, but they are still at a relatively high level. The scale of transactions in a single month is the highest, with Chengdu topping the list reaching 1.08 million square meters; The quarter-on-quarter decline in the two cities was within 2%, and the popularity decreased slightly compared with the second quarter, and the cumulative year-on-year decline was within 3%. Mainly due to the marketable improvement of the market into the market, supporting the continuation of market transaction heat. (2) Transactions in a few cities such as Nanjing, Changchun, and Changzhou increased slightly year-on-year, continuing the trend of low-level shocks. The transaction performance of these cities in July was slightly better than that in the second quarter, and the market continued to recover weakly. (3) In most cities, due to the shrinkage of supply, the decline in discounts, and the superposition of high temperature weather and market downturn, transactions continued to decline month-on-month, and Qingdao, Hangzhou, Hefei, Xiamen, etc. all saw a sharp pullback month-on-month, with a decline of more than 45%.
03Project decentralization
The number of openings is halved
The average decontamination rate decreased by 2pcts to 27%
In July, due to the mid-year sprint node, the enthusiasm of real estate companies to launch steadily declined, and a total of 139 times were opened and added in 25 key cities in the whole month, halved from the previous month; According to CRIC survey data, the average opening rate of key cities in July was 27%, a slight decrease of 2pcts from the previous month and a year-on-year decrease of 4pcts; Compared with the first quarter, the increase was 6pcts, and the decontamination rate was still at a low level. In terms of cities, they can be roughly divided into the following categories: first, the decontamination rate of Chengdu and Xi'an has increased steadily, and Chengdu has the highest decontamination rate of 79% this month; Second, the removal rate of Beijing, Guangzhou, and Shenzhen remained flat or increased month-on-month, and the market continued to stabilize; Third, the de-conversion rate in Shanghai and Hangzhou fell sharply this month, on the one hand, due to the decline in the quality of new projects, on the other hand, the continuous effect of the new policy weakened, and residents' enthusiasm for buying houses declined; Fourth, the de-conversion rate of most cities continues to be low, such as Wuhan, Hefei, Xiamen, etc., even if the de-conversion rate continues to increase, it is still less than 3 percent, and the overall market subscription enthusiasm is low, and there is no obvious sign of heating up for the time being.
04 The inventory supply-demand ratio was 0.8, resulting in a decline in inventory
Nearly half of the cities such as Suihanningsu and other cities have improved their decontamination cycles
In July, due to the decline in supply was not as good as the transaction, the overall supply-demand ratio of 30 key monitoring cities increased from 0.75 last month to 0.8, continuing to exceed supply, and the supply-demand ratio of 7 cities fell below 1, and the overall supply became tighter, Qingdao, Kunming, Nanning and other supply-demand ratios fell below 0.5, and the inventory area of 30 cities was 236.45 million square meters, down 0.9% month-on-month, the same as the same period last year. Nanjing, Guangzhou, Nanning, Changzhou, Kunming, Wuhan, Xuzhou, Foshan, Changchun, Chongqing, Jiaxing, Qingdao, Suzhou, Xiamen and other 14 cities digestion cycle has shortened month-on-month, the decline is within 5%, except for Chongqing, other key monitoring cities digestion cycle is higher than the same period last year, showing that inventory pressure has increased unabated. In absolute terms, there are still 7 percent of cities with a digestion cycle of more than 18 months.
05Second-hand housing transactions fell by 3% month-on-month and increased by 31% year-on-year
Beijing and Shenzhen held steady at a high level, and Shanghai and Hangzhou pulled back
In July, the transaction area of second-hand houses in 22 key cities is expected to be 13.93 million square meters, down 3% month-on-month and 31% year-on-year, and the growth rate has expanded. The cumulative transaction area in the first seven months is expected to be 87.31 million square meters, a year-on-year decrease of 4%. On a month-on-month basis, affected by seasonal factors, nearly 4 percent of the city's transactions fell, Shanghai, Hangzhou, Chongqing, etc. fell by about 2 percent, Beijing, Wuhan and other transactions remained stable, with an increase of less than 3%, the market continued to keep warm, Chengdu, Shenzhen, etc., the transaction scale of Chengdu broke 2 million square meters, a month-on-month increase of 17%, and Shenzhen on the basis of the high base last month, the transaction scale of this month did not decline but increased, and increased by 8% month-on-month, and hit a new monthly high since 2022. On a year-on-year basis, the key cities rose more and fell less, the transaction performance of the first and second-tier cities was generally better than the same period last year, Shenzhen, Dalian, etc. basically maintained a doubling increase, and Hangzhou, Nanjing, Chengdu, Beijing, etc. also increased by more than 4 percent, but the transaction in the third and fourth tier cities did not improve significantly, and the second-hand housing market such as Foshan and Dongguan continued to run at a low temperature, and the transaction continued to fall year-on-year.
06 Land market transactions fell by 16%
The market continues to diverge
In July, the pace of land supply in the land market was not as fast as the same period last year. As of July 28, the scale of operating land transactions in 300 cities across the country in July was only 48.28 million square meters, a decrease of more than three percent over the same period last year. In terms of popularity, the market heat increased slightly, with the average premium rate rising to 3.8%, up 0.6 percentage points from the previous month. However, the heat of the two plots in Yangpu in Shanghai and Suzhou continues to diverge, such as Shanghai and Suzhou, under the influence of the improvement of land quality and favorable policies, the premium rate of the two plots of land in Yangpu in Shanghai is more than 15%, and the popularity of land auctions has increased significantly. The average reserve price or ultra-low premium of the three parcels of land in Suzhou was traded, and the market continued to be low.
The performance of cities of each energy level was slightly different, with the first-tier transaction scale rising month-on-month, and the second- and third-tier cities both declining month-on-month. CRIC monitoring data shows that as of July 28, a total of 1.15 million square meters of land were traded in first-tier cities this month, an increase of 13% from the previous month and a year-on-year decrease of 63%; The transaction amount was 27.5 billion yuan, a slight decrease of 6% month-on-month and a year-on-year decrease of 57%, although there were land premium transactions in Beijing and Shanghai this month, but it was still not as affected by the transaction of super-large and high-priced land in Beijing in June, and the average transaction price fell 17% month-on-month to 24,012 yuan / square meter. Specifically, Beijing has the highest transaction scale, reaching 620,000 square meters, with an amount of 16.9 billion yuan, involving 5 residential land and 1 commercial land, among them, the 3.5% premium rate of the Haidian Xibeiwang plot and the 25% high premium transaction of the Dongcheng Goldfish Pond mini plot, the remaining 4 are all sold at the reserve price, and the market heat is at a low level. In contrast, Shanghai still maintains a high degree of popularity under the stimulus of high-quality land plots and the "Shanghai Nine Articles" policy, with Yangpu Pingliang and Changbai both trading at high premiums, with premium rates of 21% and 17% respectively, while Fengxian and Baoshan plots are traded at reserve prices, with a total transaction amount of 9.13 billion yuan and an overall premium rate of 8.44%. In addition, 4 commercial offices and 1 comprehensive land parcel were transacted at the reserve price or ultra-low premium in Guangzhou, while there were no transactions in Shenzhen. Second-tier cities fell in volume and price steadily compared with the previous month. Specifically, by the 28th, the transaction area in second-tier cities was 9.33 million square meters, down 33% month-on-month and 40% year-on-year. Floor prices fell slightly year-on-year, with a decline of less than 3%, to 4,884 yuan / square meter, maintaining a relatively stable level. Among them, Xi'an and Chengdu both have a transaction area of more than 2 million square meters, and Xi'an, the top of the list, has a transaction area of 2.54 million square meters, with an amount of 9.5 billion yuan, involving 16 parcels of land, all of which are traded at the reserve price, and the market heat continues to be low. Chengdu ranked second, with a transaction area of 2.07 million square meters and an amount of 14.8 billion yuan, involving 14 commercial offices and 15 residential land. It is worth noting that Hangzhou also had 2 residential land auctions this month, with Shangcheng and Linping Digital Trade City both transacting at high premiums (23% and 59%), and the overall premium rate rose to 21.9%. Except for Hangzhou, the popularity of land auctions in other cities is low, and the premium rate is mostly below 5%. Third- and fourth-tier cities showed a year-on-year decline in volume and price. As of July 28, the total transaction area was 37.81 million square meters, down 11% month-on-month, and down 40% year-on-year; The average transaction price decreased by more than 15% year-on-year to 1,514 yuan / square meter. Among the third- and fourth-tier cities monitored by CRIC, only Wenzhou has a transaction scale of more than 1 million square meters, with a transaction area of 1.37 million square meters, involving 28 parcels of land, most of which are traded at the reserve price, Shaoxing and Taizhou are located in the second and third places respectively, with a transaction area of 63 and 580,000 square meters respectively, and there are a small number of residential land transactions at a high premium in both cities, such as Taizhou, Linhaishi and Tiantai County, which have a case involving residential land at an ultra-high premium (both over 25%), making Taizhou the most popular city in the third and fourth-tier cities. Most of the remaining cities are dominated by transactions at the floor price, and the market heat continues to be low.
07 Overall, it is expected that supply and demand will continue to be low in August
The policy effect is decreasing, and the upward momentum of transactions is insufficient
Predicting August, we believe that due to the comprehensive impact of high temperature weather, supply constraints, and the marginal decline of the boosting effect of favorable policies, the overall transaction expectation in August will continue to fluctuate at a low level, and the transaction scale will be the same or slightly increase slightly compared with this month. Different cities still show significant differentiation: the first echelon is Chengdu and Xi'an, which have relatively strong market resilience in the short term, and the siphoning of surrounding cities has supported the overall new housing transactions; The second echelon is the decreasing marginal effect of new policies such as Beijing, Shanghai, Shenzhen and Hangzhou, this month affected by the supply structure, the de-conversion rate of Beijing and Shenzhen continued to increase, while Shanghai and Hangzhou fell from a high level, and the follow-up market heat will also intensify with the fluctuation of new projects entering the market; The third echelon is Hefei, Nanjing, Wuhan, Changsha, Tianjin and other second-tier cities, and new housing transactions are still in a period of phased adjustment, and there will be no significant rebound in the short term. Most of the other weak second-tier and third- and fourth-tier cities are likely to have no improvement. The second-hand housing market is still at a high level of volatility, and the overall transaction momentum has slowed down slightly, but due to the large base of buyers who just need to buy houses, the market resilience is still slightly better than that of new houses, and the overall transaction scale is expected to continue to be high in August.
Typography | construction
This article is excerpted from the July 2024 National Market Briefing 8P
More monthly research reports
market
Monthly
The supply and demand of new homes fell by more than 4% month-on-month in January, and it is expected to remain sluggish in February (January 2024)
In February, during the Spring Festival, the supply and demand of the property market fell to the lowest in 6 years, and the premium rate of the real estate market rebounded (February 2024)
Property market transactions doubled month-on-month in March but remained low, and recovery is expected to continue in April (March 2024)
Supply and demand fell in April but higher than the monthly average of the year, and it is expected to remain low in May (April 2024)
Transactions increased slightly in May, and the policy window is expected to rebound in June (May 2024)
In June, the new policy supported the transaction volume to hit a new high in the year, and it is expected to continue to stabilize in July (June 2024)
Monthly M&A report
Country Garden disposes of a number of assets in Guangzhou and overseas for 9 billion yuan, and Cinda takes over Sunac and Kaisa projects again (January 2024)
R&F sells HK$6.2 billion of London project-based bonds, Vanke disposes of assets to cope with debt repayment peak (Feb 2024)
Local state-owned assets take over Sunac and Shimao projects, and Yinyi Real Estate is planned to be sold at a 7% discount (March 2024)
Vanke in talks to sell its stake in GLP, Zhongnan may receive investment from PAG (Apr 2024)
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The transaction scale of the monthly land report is at a cyclical low, and the premium rate has stopped falling and increased slightly (January 2024)
Transaction size falls to record low, premium rate recovers to 5.2% (February 2024)
Transaction volume continues to be historically low, and the popularity of each city is significantly differentiated (March 2024)
The low level of the transaction area was flat, the premium rate declined, and the unsold auction continued to be high (April 2024)
The transaction area halved year-on-year, the premium rate declined, and the unsold rate reached a new high (May 2024)
The transaction scale continues to be low, the popularity rebounds, and Qingdao gives birth to Xindiwang (June 2024)
Transactions and construction areas fall periodically, and market enthusiasm continues to diverge (July 2024)
The monthly performance of the top 100 enterprises in the monthly report hit a new low, and most real estate investment has not yet started (January 2024)
Affected by the Spring Festival holiday, real estate companies' monthly sales and financing hit a new low (February 2024)
The sales of the top 100 fell by more than 40% year-on-year, and the core cities of central state-owned enterprises grabbed land (March 2024)
Top 100 sales and financing remain low, corporate investment picks up slightly (April 2024)
The sales of the top 100 enterprises increased slightly month-on-month, and the top state-owned enterprises saw significant price reductions (May 2024)
The decline in the performance of the top 100 in the first half of the year narrowed, and the investment of the top real estate companies all declined (June 2024)
Monthly Capital Report: Monthly financing of real estate enterprises decreased by 29% year-on-year, and favorable financing policies were frequently issued (January 2024)
Monthly financing of real estate enterprises hit a new low since 2021, and the implementation of the financing coordination mechanism accelerates (February 2024)
State Council Meeting Releases Favorable Policies, Shum Yip Property and Prosperity Services Submit Listing Applications (March 2024)Financing of Whitelisted Projects Launches in Large Quantities, Xi'an Economic Development Property Submits Listing Applications (April 2024)
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Financing scale decreased by 36% year-on-year in the first half of the year, Midea Real Estate plans to divest real estate development business (June 2024)
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