Source: Securities Times

Recently, Shanghai, Guangzhou, and Shenzhen have successively announced measures to adjust and optimize real estate policies. In particular, adjustments to mortgage policies have attracted market attention. According to incomplete statistics, by the end of May, nearly 25 provinces and cities had clearly lowered the down payment ratio for the first and second home. With the exception of the first-tier cities of Shanghai and Shenzhen, all other provinces and cities had adjusted it to 15% and 25%.

According to Yan Yuejin, research director of the Yiju Research Institute, the minimum down payment ratio in Shenzhen is 20%, which is consistent with Shanghai. This shows that first-tier cities are fully entering the important stage of reducing down payments and interest rates, which has a positive effect on the subsequent establishment of a comprehensive and relaxed mortgage policy environment. After the new housing credit policy was gradually implemented, what changes have occurred in the Shanghai and Shenzhen property markets? To this end, the Securities Times reporter conducted a factual investigation into the two markets.

The sales center is bustling

On June 1, the Securities Times reporter visited a sales office for a real estate under construction between Central and Outer Ring Road in Pudong, Shanghai, only to see that the sales hall was full of people. Due to the large number of visitors, it was difficult for the staff to get out. Viewers were required to register at the front desk and wait to “gather enough people” before being brought into the model room.

According to staff, after the first opening of the property in March of this year, the remaining batch of properties can be directly subscribed. Several of the bungalows and high-rise buildings involved in the second opening are expected to begin next week and are currently in the filing stage.

“Now it seems that the second round is also about to shake the number. Among them, high-rise side apartments are the most popular, and the winning rate is estimated to be around 50%; there are very few bungalow properties in general, and in particular, the winning rate for large bungalows is probably even lower.” The staff member said.

It is worth noting that since this property is a new home in the outer ring and the unit price is high, it is a mid-range improved community, and it mainly attracts replacement rather than immediate demand groups.

Despite the hustle and bustle at the house viewing scene, the transaction situation was not encouraging. The reporter queried first-hand housing information at the Shanghai Real Estate Exchange Center and found that the total number of units sold in this property in March this year is 292, of which 165 units have already been sold, and the total number of units that can be sold is 127, with a removal rate of less than 60%.

On the same day, another property under construction outside Shanghai's Pudong Outer Ring Road looked even more popular. The reporter walked into the sales center and saw that the line to make an appointment to see the house had already lined up at the entrance. According to information, since the unit price per square meter is as low as 50,000 yuan, and it is located outside the outer ring, the property mainly attracts young people in need.

“We already opened in May, and now we have basically sold out the 10th floor and below, leaving only the upper floors above the 10th floor.” The staff stationed in the model room explained that judging from the apartment type, the three-bedroom apartment of more than 100 square meters was quite popular, while the small apartment of more than 80 square meters was relatively unpopular.

Another staff member said that the number of sets signed that day was close to 10. After Shanghai adjusted its housing purchase restriction policy on May 27, the number of people viewing homes increased markedly, and the transaction situation also improved slightly.

The reporter inquired about information from the Shanghai Real Estate Exchange Center and found that the property opened in mid-early May, with a total number of 338 units. Of these, 73 units have already been sold, and the total number of units that can be sold is 265, and the removal rate is only 22%.

Vivienne, a house viewer, told the reporter that she is a non-Shanghai single. Currently, she is considering buying a new house outside the Outer Ring Road or a second-hand house in the Outer Ring Road, but she is hesitating between the two. “Recently, the new homes outside the Outer Ring Road are generally in a bad location. You can only commute by car, and the housing rate for high-rise residences is low, so it will be crowded to pick up your parents to stay in the future. However, although the transportation within the outer ring is convenient, the mobility is poor, and the parents are not very supportive of buying 'old dilaps', saying 'not as good as my hometown. '”

“Brother, are you still considering a house in Taicang? Near Taicang South Railway Station, Shanghai's Provident Fund can now pay off Jiangsu's mortgages...” In the early morning of June 1, “Shanghai Piao” Xiao Qin was woken up by a phone call from a real estate agent. He still remembers that Taicang opened a direct high-speed railway to Shanghai a few years ago, making it the most suitable city around Shanghai for commuting across provinces after Kunshan, and leaflets for Taicang real estate continued to pour into major subway stations in Shanghai. Since then, from time to time, Xiao Qin has received phone calls from local real estate agents or agents in Taicang.

However, as the property market has become increasingly sluggish in the past two years and the purchase restriction policy in Shanghai continues to relax, Taicang real estate calls have become less frequent. Recently, Shanghai issued the “Notice Concerning the City's Housing Provident Fund Withdrawal and Repayment Policy for Offsite Housing Provident Fund Loans in the Yangtze River Delta”, which makes it clear that under certain conditions, buyers can withdraw the Shanghai Provident Fund to pay for home purchase loans in the three regions of Jiangsu, Zhejiang, and Anhui.

“Now that the purchase restriction policy in Shanghai has been gradually liberalized, single non-domiciled people can buy new and second-hand homes outside the Outer Ring Road and second-hand homes within the Outer Ring Road. The attractiveness of the Shanghai region continues to decline.” Xiao Qin said, “Of course, the price still has an absolute advantage in the Shanghai city. The total price of one room in the outer ring of Shanghai can be replaced with two or even three rooms in Kunshan or Taicang, and commuting by high-speed rail is also quite convenient. But I won't be considering a house in a Shanghai city just yet.”

Accelerate the pace of entry into the market

Meanwhile, in the Shenzhen market, May of this year can be said to be the most intensive month for the introduction of Shenzhen property market policies in recent years, including implementing “zoning regulation,” shortening the social security period for non-Shenzhen households to 1 year, free supervision of interbank “secured transfer” funds, lowering interest rates on provident fund mortgages, and lowering down payment ratios and commercial loan interest rates.

According to data monitoring by the Leyoujia Research Center, in May, Shenzhen signed 2009 first-hand housing units online, and the city transferred 3,963 second-hand housing units, down 5% from the previous month and up 42% from the previous year. However, according to all store transaction data, the number of second-hand residential units signed in May rose more than 30% month-on-month and 110% year-on-year. Judging from store transaction data, the second-hand housing market in Shenzhen in May was better than in April. In the past 3 months, the monthly average number of second-hand housing registrations in Shenzhen has remained around 5,000 units. Although it fluctuates, it is basically close to the “boom and dry line” level. It can be seen that the market transaction volume is gradually stabilizing. Compared to the gradual return to normal trading volume, the price continued to drop slightly. The transaction price of second-hand housing in Shenzhen in May was 62,700 yuan per square meter, down 1.3% from the previous month, narrowing from April.

Xiao Chen, a Shenzhen agent who has been in the business for over 8 years, has been busy in recent days sending news of down payment ratios and interest rate cuts to customers who need to buy or exchange houses. “Every time a favorable policy drives a wave of transactions, and this time too, especially for customers who have replaced, the number of house visits over the past two weekends increased by nearly 20% compared to last weekend.” Xiao Chen told the reporter, “However, for replacement customers, the down payment ratio has little impact; they are more concerned about the price.”

At a new housing project near Changlingpi subway station in Nanshan, Shenzhen, the marketing manager said that since Shenzhen announced a reduction in the down payment ratio, there has been a marked increase in customer visits. Due to the project's current status and the lowest discount on the day of opening reached around 86 percent off, buyers were very enthusiastic on the opening day, and the house selection was not over until the evening. Participating buyers said that for “cost-effective” properties, the New Deal will accelerate their confidence and pace in entering the market. Meanwhile, in the Longgang district of Shenzhen, which is in the “relaxation” area of purchase restrictions, the reporter saw that a new housing project is being set up on site. The sales staff also told the reporter that the current subscription situation is better than expected, but the price has almost returned to 2019 levels after opening and discounting.

The reporter discovered that recently, new homes in Longgang and Longhua districts posted posters saying that some discounts will be recovered starting June 1. In response, industry insiders said that withdrawing discounts is only a “coercion” method commonly used by developers, that is, to push customers to make a deposit. In fact, the current new housing projects in Shenzhen are all seizing the opportunity to promote sales. “As long as buyers are willing to buy it, they will still find a way to give them the discount they should have. Although the market has improved, the overall market is not as good as last year's.” The person in charge of marketing for a new housing project in Longhua District told reporters.

The market is expected to enter the policy implementation period

In May, the supervisory authorities implemented a number of measures, including lowering the lower limit of the down payment ratio, abolishing the lower interest rate limit for first and second home loans, lowering interest rates on provident fund loans, and setting up 300 billion yuan of affordable housing reloans to support local housing enterprises to acquire unsold commercial housing.

According to survey data from the 100 Cities Price Index of the China Real Estate Index system on the new construction and second-hand housing sales markets in 100 cities across the country, the average price of second-hand housing in Baicheng in May this year was 14,870 yuan per square meter, down 0.70% from month to month, and has been falling for 25 consecutive months. Currently, owners' “price for volume” is driving the price of second-hand housing in Baicheng to continue to decline. The overall market transaction trend continued in March and April, and the scale remained at a certain level. The average price of newly built homes in Baicheng was 16,396 yuan per square meter, up 0.25% month-on-month and 1.33% year-on-year. Driven by the entry of quality improvement projects in some cities, the price of newly built homes in Baicheng rose structurally from month to month.

The China Index Research Institute believes that overall, local governments are currently actively implementing the “May 17 New Property Market Deal.” It is expected that the down payment ratio in most cities will be lowered to the lower limit of the policy and the lower limit of mortgage interest rates will be lifted. Looking forward to the future, as core Tier 1 and 2 cities gradually implement various measures, the market is expected to enter a policy implementation period in the future, but the pace of market recovery still depends on changes in residents' income expectations. At the same time, if local state-owned enterprises collect and store unsold commercial housing and other policies to absorb stock can be implemented relatively quickly, it will also play a positive role in improving the cash flow of housing enterprises and mitigating industry risks.

edit/lambor