Financial Associated Press (Shanghai, reporter Wang Haichun) news, affected by the increase in supply, shrinking demand, commodity residential inventory has shown an upward trend, some third- and fourth-tier cities are facing another round of destocking test.
According to Kerry monitoring data, as of the end of September this year, the inventory of commercial housing in 100 cities across the country exceeded 600 million square meters, which increased year-on-year and month-on-month, and the deindustrialization cycle also rose from 13.04 months at the end of August to 14.92 months, which was significantly higher than the same period in 2020.
Among them, some third- and fourth-tier cities are facing an extended destocking cycle, and the sales pressure of housing enterprises has further increased. Under the background of oversupply and market downturn, the deindustrialization cycle of third- and fourth-tier cities surged to 17.53 months, higher than the average level of 100 cities. Third- and fourth-tier cities such as Beihai, Lianjiang, Zhaoqing, Yantai, Hengyang, and Zibo, which lack sufficient fundamental support, have a digestion cycle of more than 30 months.
"In September and October, the market supply increased a lot, but the rate of de-industrialization did not increase significantly. Affected by multiple factors, the market has seen a wait-and-see mood, and the pace of home buyers entering the market has slowed down; in small cities with relatively weak economic foundations, sales pressure is particularly large. The manager of the marketing department of a medium-sized housing enterprise in Shanghai told reporters.
Yang Kewei, deputy general manager of kerui research center, pointed out that September and October are the traditional peak sales season, and the enthusiasm of housing enterprises to push the market has steadily rebounded, and the supply of 100 cities in September rose by 28% month-on-month. "However, due to the tightening of credit and the continuous regulation of hot cities, the property market transactions still continued the downward trend, falling year-on-year, which made the inventory show an upward trend."
The data shows that the destocking cycle of individual third- and fourth-tier cities even exceeds 110 months. The report obtained by the reporter from the Yihan think tank shows that by the end of September 2021, the destocking cycle in Anshan City, Liaoning Province, will be as long as 117 months.
From the perspective of stock size, the stock of Anshan is not very large. As of September this year, the inventory area of commercial housing in Anshan is 1.6185 million square meters, and the inventory of commercial residential units is 8930 units.
In fact, Anshan's current destocking cycle has been reduced compared with the end of last year. According to the monitoring data of Yihan Think Tank, as of December 2020, the inventory area of commodity residential buildings in Anshan was 1.6445 million square meters, and the inventory of commercial residential units was 9438 sets, and the destocking cycle reached 134.8 months. It can be seen from the data changes that in 9 months, the destocking area of Anshan commercial housing was only 296,500 square meters.
In addition, the inventory cycle in Jiayuguan, Fuxin, Luzhou and other cities has exceeded 30 months.
According to data from Yihan Think Tank, as of September this year, the deindustrialization cycle of commercial housing in Jiayuguan City was as long as 61.5 months, about 45.8 months in Fuxin City, about 43.1 months in Luzhou City, and about 32.4 months in Yantai City.
"Cities of different energy levels present differentiated markets. In September, the supply of large increases caused a short-term increase in inventory, the second-tier cities did not change much year-on-year, basically the same as last month, but the third and fourth lines increased year-on-year, the increase was 6%-7%, under the downward pressure of the market, inventory risks continued to intensify. Yang Kewei said.
However, not all third- and fourth-tier cities have a long deindustrialization cycle. As of the end of September this year, the digestion cycle of Deqing, Yancheng, Shangrao, Quanzhou, Jinjiang and other cities was less than one year.
The marketing manager of a real estate agency told reporters that the purchase demand in some third- and fourth-tier cities in the north and the central and western regions has declined, coupled with the current market expectation price has been lowered, which has further increased the pressure of dematerialization.
"Cities with higher energy levels have absorbed many talents transferred from third- and fourth-tier cities. However, many third- and fourth-tier cities in the north have lost a lot of population in recent years, and many young people have shifted to large and medium-sized cities because of the lack of suitable development opportunities in the local area. Now the market wait-and-see sentiment has intensified, making the project sales pressure unabated but increasing. The aforementioned marketing manager added.
International rating agency Standard & Poor's also believes that the real estate market in areas without population and economic growth support will face greater pressure to dematerialize.