Since the end of April, favorable policies have continued from the central government to the local authorities. In particular, in mid-May, “three arrows went hand in hand”, such as lowering the down payment ratio, lifting the lower interest rate limit, and lowering the interest rate on the Provident Fund. The current mortgage policy is already more relaxed than in 2016. Judging from the current market situation, the increase in favorable policies has indeed stabilized market confidence in the short term. Judging from the transaction data for 65 key cities in the past week (5.13-5.19), “this is less than enough”. Compared with the weekly average in April, it has increased 17% compared to the weekly average in April, but it is not as high as the average weekly average for March during the year. Judging from project visits and subscriptions, there has been a steady increase in market activity in many places.
After the 517 New Deal, 11 cities cut down payments for the first set and the second set; only the four cities of Luchang and Hanqing cut mortgage interest rates
According to the CRIC survey on the implementation of the 517 New Deal in 24 cities, it can be seen that local governments are significantly faster in following up on reducing down payments than interest rates. Eleven cities have already cut the ratio of first-home and second-hand housing to 15% and 25%, but only Hefei, Changsha, Wuhan, and Qingdao have cut mortgage interest rates so far, and most of the remaining cities are still in the process of being adjusted.
New housing transactions in 65 cities increased 17% compared to the weekly average in April, falling short of the March high. The third and fourth tier “bottomed out” and rebounded
Judging from the current trend of new housing, the overall market continued to recover weakly in May, “more than the above.” According to CRIC monitoring, the commercial residential transaction area in the 20th week of 2024 in 65 key cities across the country was 3.308,900 square meters, which is basically the same as the 19th week. Compared with the average weekly average in April 2024, it increased 17%, but decreased by 4% and 10%, respectively, compared with the average weekly average in March and the second half of last year during the year.
In terms of energy levels, the three- and fourth-tier restoration situation is better than the average weekly volume of the 40 third- and second-tier cities in the past week. The reason for this is that most third- and fourth-tier cities have experienced an adjustment period of 2-3 years, and the base is low, and they are already in the “no reduction” stage in demand. For core Tier 1 and 2 cities, the overall favorable new policy has yet to ferment, and is not clearly reflected in the transaction side.
The number of visitors to projects in many cities such as Hangzhou, Ning, and Zheng rose. Chengdu sold out immediately after opening, and Shenzhen “sold houses overnight”
Visits and subscriptions to core Tier 1 and 2 cities all rebounded to varying degrees last week. Based on current transaction-side performance, we can divide key cities into the following categories:
First, hot spots such as Shanghai, Chengdu, and Xi'an have stopped falling in market transactions in the past week, and market popularity has remained high due to the intensive promotion of influencer markets in core regions. Take Shanghai as an example. The “Capitaide Maoming Mansion”, a luxury housing project in the Huaihai Middle Road sector in Huangpu District, which opened on May 16, had an average registered price of 168,000 yuan/square meter. 75 units were sold out within 45 minutes, and the daily sales volume exceeded 3.1 billion yuan. Another example is Chengdu. Last week, 4 projects were launched: Jinfa Plaza in Jinjiang District, Yuanda Tianchen Residence in the High-tech Zone, Tianjun Poly Xinchuan in the High-tech Zone, and Luhu Ecological City in Tianfu New Area. A total of 438 apartments were launched. Due to factors such as scarce location, superior support, and strong product strength, the opening and elimination rate of all 4 markets was 100%.
Second, market popularity has clearly rebounded in the short term. With Shenzhen and Wuhan as examples, overall transactions are already significantly better than the average weekly level in the second half of last year. Typical examples include Shenzhen. Good news of hot sales is frequent, and new products are shipped at an accelerated pace. According to CRIC monitoring, 4 residential projects opened and entered the market last week, and a total of 1,222 residential properties were sold. On May 18, the Hongrongyuan Yinxuan Center Building, located in Baozhong, lived up to expectations. The 129 new houses had almost sunshine on the day of opening, and collected about 1.5 billion yuan on the same day; Futian Jingji Chenyue House sold 157 units with a floor area of about 85-140 square meters and 2-4 rooms, with initial sales exceeding 500 million yuan. Meanwhile, Yuejian Hefu at the Qinghu subway entrance promoted 717 units of 92-129㎡ 3-4 rooms. Over the weekend, the sales volume exceeded 518 million yuan. The number of door-to-door sales exceeded 3,000 units. The opening was 92% off, and “overnight house sales” were not interrupted for 24 hours. Guangming's Runjingli was certified and sold as soon as the evidence was obtained last Friday. As of Sunday, 83 units of 78-89 square meters were sold. As of Sunday, 83 units had been sold, and more than 1,000 people had visited.
Another example is Wuhan, which is mainly driven by a single hot market in the hot regions of Hankou and Optics Valley. There was a slight rebound in project visits in week 20: the city's average number of single-market visits was 56 groups, up 8% from last week, up 12% from April, and the average number of single-market subscriptions was 2.7 units, up 17% from last week, 13% from April, and the conversion rate of 4.8% increased 0.3 percentage points month-on-month.
Third, the number of visits to projects in most cities, such as Beijing, Hangzhou, Nanjing, Suzhou, Hefei, and Zhengzhou, is steadily increasing, and market activity is increasing, but this has not yet been reflected at the transaction end. Taking Hangzhou as an example, we investigated mainstream projects. The number of single market visitors in week 20 was 160, up 45% from the previous month, up 50% from April; the number of single plate subscriptions was 6.4 sets, up 64% month-on-month, up 19% from April. Some hot spots recreate “social security giants”: The results of Greentown Chen'an Yinyue in the Yunhe Xincheng section showed that 141 properties were opened for the first time, with a total of 1008 households registered. The overall winning rate was as low as 13.99%, and social security for households with housing was as high as 118 months.
Another example is Nanjing. The average number of single game visits in week 20 was 67, the same as the weekly average in April, a steady increase of 40% compared to the weekly average in the second half of last year. However, judging from the subscription volume, the single set was only 2.17 sets, which is significantly less than the average weekly average for April and the second half of last year.
Meanwhile, in the 20th week of Zhengzhou's overall market visits increased by about 9% month-on-month, and subscription volume decreased by 1% month-on-month. The main projects currently on sale all subscribed for about 6.6 sets (6.7 units last week). Looking at the breakdown, improvements fell 22% month-on-month; post-reform increased 33% month-on-month; and demand fell 3% month-on-month.
The four are individual weak second-tier cities such as Chongqing, Changchun, Fuzhou, Nanning, etc., and the market has not improved significantly yet. Taking Chongqing as an example, the number of visitors in the 20th week was 7290 groups, down 2.02% from month to month. The number of subscriptions was 313 units, down 8.48% from month to month, and the conversion rate was 4.29%. Mainly due to the continued relaxation of property market policies and the release of limited-time special housing offers by housing enterprises, which have dampened customer confidence in the market, the conversion rate is low. Another example is Changchun. The number of weekly visits to key monitoring projects in the 20th week increased by only 1% compared to the previous week, and the number of subscriptions to the case site decreased by 22%. Most of the increase in case visits is mainly due to case commission and adjustments to visit policies. In fact, there has not been much change in overall transactions; in the case where down payments have been reduced and interest rate policies have not been implemented, the overall market is relatively calm.
The second-hand housing market recovered, Beijing and Tianjin returned to “Xiaoyangchun” in March, and transactions in Shanghai improved last weekend
Due to the popularity of the early market, second-hand housing was limited by favorable new policies. According to CRIC monitoring data, in the 20th week of 2024 (5.13-5.19), the transaction area of second-hand housing in the 14 key monitored cities was 1.4692 million square meters, down 18% and 24%, respectively, from the same period last month, down 17% from April, down 9% from March, and increased by 5% compared to the weekly average in the second half of 2023.
It is worth noting that key cities have ushered in a spotty recovery. Take Shanghai as an example. According to official website data, the number of second-hand residential units sold reached 806 units and 743 units during the harvest weekend after the release of the 517 New Deal, which is significantly higher than the average of 609 units per day in April 2024 and 654 units per day in March 2024.
Another example is Beijing. On the first weekend after the 517 New Deal (May 18-19), the average daily second-hand housing sales in Beijing once again surpassed 1,000 units. Among them, over 900 units were sold on May 18, more than 1,100 units were sold on May 19, and a total of more than 2,000 units were sold over the weekend, which basically reached the popularity of Xiaoyangchun in 2024. Coincidentally, in Tianjin, the popularity of the second-hand housing market is steadily picking up. According to data from third-party platforms, second-hand housing sales in Tianjin rose 27% month-on-month in the 20th week, and the weekly transaction scale was basically the same as in March.
Overall, the property market's 517 New Deal “reducing down payment ratio+removing the lower interest rate+lowering the provident fund interest rate, etc.” has indeed boosted buyers' confidence in the short term, and property market activity has also increased to varying degrees: current transactions in the new housing market have rebounded at a low level, but not yet high in March. The second-hand housing market is currently recovering more slowly in some cities due to high popularity in the early stages.
Predicting the market later, we believe that new housing transactions in May will increase to a certain extent compared to April, and the absolute volume is expected to be the same as in March. Cities will continue to differentiate their markets: for the top hot cities in the early stages, such as Shanghai, Chengdu, and Xi'an, the popularity is expected to stop falling and stabilize in the short term, and the number of recent front-end index projects such as Hangzhou, Nanjing, Suzhou, Hefei, and Zhengzhou has picked up. It is expected that in the future, as policies continue to ferment, the transaction end will also be reflected to a certain extent.
Editor/Jeffrey