Source: Securities Times Author: Zhang Da Wu Jiaming
During this year's 3-day Dragon Boat Festival holiday, although the daily transaction volume of new homes in key cities has decreased compared with the same period last year, it has significantly increased compared with the May Day holiday this year.
According to the latest data from the China Index Research Institute, during this year's Dragon Boat Festival holiday (June 8-10), the daily sales area of new houses in 30 representative cities decreased by about 16% compared to the holiday in 2023, but increased by more than 60% compared to the daily turnover during this year's May Day holiday.
Taking Beijing as an example, the activity level of new houses has declined slightly due to the holiday, while the number of viewings and consultations for second-hand houses remains active. During the Dragon Boat Festival holiday, there were 128 new house residential signings and 187 second-hand house residential signings.
Industry insiders believe that the State Council’s executive meeting held on June 7 further clarifies the policy direction of "inventory reduction" and "market stabilization", and releases more powerful bullish signals. Among the first-tier cities, only Beijing has not followed a series of inventory reduction policies introduced in May. Future policies such as reducing down payments and interest rates can be optimized. As the core first- and second-tier cities gradually implement various policy measures, the market may gradually enter a period of policy effect realization. The market activity in core cities in June is expected to improve.
In 30 cities, the daily transaction volume of new houses increased by more than 60% compared to the May Day holiday.
This year's Dragon Boat Festival holiday is the first small holiday after the May real estate policy and the National Council meeting in June. According to research by the China Index Research Institute, in terms of the performance of the new housing market during the Dragon Boat Festival holiday, real estate companies have generally increased their efforts to destock, and the number of visits to most cities' sales offices was high due to the combined effect of pre-holiday policies. However, the transactions were still lower than during last year's Dragon Boat Festival holiday.
According to data from the China Index Research Institute, during this year's Dragon Boat Festival holiday, the daily sales area of new houses in 30 representative cities decreased by about 16% compared to the Dragon Boat Festival holiday in 2023, but increased by more than 60% compared to the daily transaction volume during this year's May Day holiday.
Specifically, in terms of new houses, during this year's Dragon Boat Festival holiday, the volume of home visits in Shanghai, Guangzhou, Shenzhen, Hangzhou, Wuhan and other places increased significantly. Among them, daily transaction volumes in Guangzhou, Shenzhen, and Wuhan all increased during the Dragon Boat Festival holiday, while there is a trend towards market differentiation in cities such as Nanjing, Zhengzhou, and Tianjin. Projects in the core areas performed well and there was still pressure to destock in suburban areas. For second-hand residences, in this year's Dragon Boat Festival holiday, the number of transactions in most cities in the key 11 cities increased compared to the Dragon Boat Festival holiday last year. Among them, the market activity in Shanghai and Shenzhen has improved significantly under the influence of previous policies, while Wuxi, Nanning, Wenzhou, Foshan and Huzhou grew compared to the Dragon Boat Festival holiday last year. In Beijing, the city has not yet adopted the May real estate policies, and some home buyers are still in a policy-watching period. As a result, the number of second-hand house transactions decreased by more than 10% compared to last year's Dragon Boat Festival holiday.
According to weekly data, on the new house side, according to data from the China Index Research Institute, in the second week of June (June 3-9), the sales of residential properties in 20 key cities decreased by 24.0% and 24.3% compared to the previous month and the same period last year respectively. Since June, the high base effect has clearly weakened, and the year-on-year decline has narrowed slightly, but there is still pressure on the market to make adjustments. On the second-hand side, last week (June 3-9), the number of second-hand house transactions in key cities decreased by 6.0% and increased by 5.7% month on month and year on year respectively, performing better than new houses.
As for the performance of the Beijing real estate market during Dragon Boat Festival, China Index Research Institute pointed out that most new house sales offices have intensified their promotional efforts to destock, with discounts and special-priced properties as the main methods. Due to the holiday, the activity level of new houses has declined slightly and the number of visitors at sales offices dropped significantly two days later. For second-hand houses, the number of viewings and consultations remains active. According to data from the Beijing Municipal Commission of Housing and Urban-Rural Development, during the three-day Dragon Boat Festival holiday, there were 128 new house residential signings and 187 second-hand house residential signings. Chief Analyst Zhang Dawei of Centaline Property believes that the overall net signing volume in Beijing during Dragon Boat Festival was normal, with actual daily transaction volume for second-hand houses at around 600-650 units, a slight adjustment compared to the nearly 1,000 units per day during the three weekends after the May real estate policy.
Beijing and Shenzhen real estate markets overall warming up.
Regarding the Beijing real estate market performance during the Dragon Boat Festival, China Index Research Institute pointed out that most sales offices of new houses have intensified promotional efforts to destock, mainly by offering discounts and special-priced properties. The activity level of new houses has declined slightly due to the holiday. The number of visitors was high on the first day of the holiday, but significantly dropped in the following two days. As for second-hand houses, the number of viewings and consultations remains active.
Data from the Beijing Municipal Commission of Housing and Urban-Rural Development shows that during the three-day Dragon Boat Festival holiday, there were 128 new house residential signings and 187 second-hand house residential signings.
Chief Analyst Zhang Dawei of Centaline Property believes that the overall net signing volume in Beijing during Dragon Boat Festival was normal, with actual daily transaction volume for second-hand houses at around 600-650 units, a slight adjustment compared to the nearly 1,000 units per day during the three weekends after the May real estate policy.
Regarding the slight decline in the daily transaction volume of second-hand houses during Dragon Boat Festival compared to the previous three weeks, Zhang Dawei believes that on the one hand, it is due to the influence of the holiday combined with the high school entrance exams, as the focus of the market shifted. On the other hand, it is because the demands released by the previous policies have been digested, and the demands after the new policies are now in the waiting stage.
As for the Shenzhen real estate market, the performance during Dragon Boat Festival also showed some warming up. Regarding the second-hand house market, the major real estate agencies have published their respective signing volumes. Among them, according to monitoring by the Shell Research Institute in Shenzhen, the signing volume of second-hand houses in Shenzhen during this year's Dragon Boat Festival holiday was 222% higher than during last year's Dragon Boat Festival holiday (June 22nd to 24th, 2023). The substantial increase in transactions was mainly driven by policy.
In some of the new property projects' marketing centers in Luo Hu, Fu Tian and Guang Ming in Shenzhen, the reporter saw many home buyers visiting during the holiday. However, some sales managers told the reporter that there were still difficulties in turning these visits into transactions, and many home buyers are still expecting further relaxation of policies.
The Shenzhen Real Estate Intermediary Association believes that after entering June, the traditional mid-year market trading atmosphere will enter a relatively weak period. In order to gradually stabilize the market, bullish policies may continue to be added and should be fully implemented, which will be fully realized in the next few months.
Core cities in June are expected to continue to improve.
At the executive meeting of the State Council on June 7th, it emphasized that it is necessary to "focus on promoting policy measures that have been introduced to take effect and continue to study and reserve new policies and measures to reduce inventory and stabilize the market. For the digestion and activation of existing property properties and land, it is necessary to emancipate the mind and broaden the thinking, and at the same time, proceed steadily and promote it solidly", releasing bullish signals.
Chen Wenjing, the director of market research of the Zhongzheng Research Institute, believes that as various policy measures are gradually implemented in core first-tier cities, the market may gradually enter a period of policy effect realization. At the same time, in June, real estate companies will also enter the first half of the year’s performance sprint stage. In the short term, the activity level of the core city market is expected to improve. Coupled with the weakening of the high base effect, the year-on-year decline in new housing sales area nationwide expected to gradually narrow. However, the overall rhythm of the market's bottom-building still depends on the transformation of residents' income expectations.
Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Institute of Urban Planning, believes that the overall house price level is still high relative to residential properties, which is why transaction volume has increased recently but prices are still falling. This is because the real estate market is still in the process of returning from asset attributes to residential attributes.
Editor/Lambor