[Epoch Times, May 18, 2022](The Epoch Times reporter Ning Haizhong comprehensively reported) The CCP authorities have recently tried to take measures such as policy relaxation to stimulate the real estate industry, which has fallen into a trough. Lu media reported that only 18 days have passed in May this year. 40 cities have taken action to save the property market, and 130 cities have proposed policies to save the property market this year. However, under the strict epidemic control policy, some analysts believe that the authorities’ rescue of the market has little effect.
The authorities will suppress the real estate first and then loosen the rescue policy “blowout”
“Sino-Singapore Jingwei” reported that Hangzhou City issued the “Notice on Further Promoting the Stable and Healthy Development of the Real Estate Market” on the 17th, relaxing the second-hand housing transaction policy, buying second-hand housing within the city’s purchase limit, and having settled in the city for less than 5 years. For households with household registration, the original requirement to continuously pay urban social security for 2 years shall be cancelled; for households with non-city household registration, the 4-year continuous payment of social security shall be adjusted to 1 year.
Hangzhou has also increased the purchase qualifications for three-child families. Eligible three-child families will increase the number of housing units within the purchase limit by 1; when registering for the public lottery sale of newly built commercial housing, refer to the priority lottery for “houseless families”.
Zhang Dawei, chief analyst of Centaline Real Estate, told Sino-Singapore Jingwei that Hangzhou’s policies are not very strong, but as the leading representative of the hottest area in the current property market, Hangzhou’s move represents that this round of property market rescue will be fully upgraded.
The real estate sector, a key driver of China’s economic growth, has been discouraged by many potential homebuyers worried that some real estate projects won’t be completed after authorities began tightening borrowing last year. This plunged the entire real estate industry into recession. Many large-scale developers, including Evergrande Group, were caught in the capital chain blockage, unable to repay their loans on time, and even ran away from debt.
According to statistics from the Centaline Real Estate Research Institute, since 2022, nearly 130 cities have issued rescue policies.
At the end of April this year, the Politburo meeting of the Communist Party of China proposed to “support local governments to improve real estate policies based on local conditions, support rigid and improved housing needs, and optimize the supervision of pre-sale funds for commercial housing”, and local property market policies have entered intensive adjustments.
According to reports, according to incomplete statistics, since May, at least 40 cities including Chengdu in Sichuan, Haikou in Hainan, Luoyang in Henan, Dongguan in Guangdong, Putian in Fujian, Jiaxing in Zhejiang, Nanjing in Jiangsu, and Shenyang in Liaoning have introduced rescue policies, mostly by reducing down payment and provident fund loan amount. Improvements, subsidies for house purchases, and cancellation of sales restrictions are the main methods.
In addition to Hangzhou, Dongguan, Nanjing, Shenyang and other places have also issued similar preferential policies for families with three children.
Ineffective rescue of the market, April housing market sales fell sharply
The Hong Kong Economic Journal reported on the 2nd that the sales volume of China’s top 100 real estate companies in April was 428.47 billion yuan (RMB, the same below), down 58.6% year-on-year, and the decline was 5.9 percentage points higher than that in March. And it is the highest level of year-on-year decline in a single month in recent years; it fell by 16.2% month-on-month, a decline greater than the same period in recent years.
The overall performance of the market remained sluggish in April, and some cities were affected by the epidemic, and the downward pressure on the real estate market intensified. The transaction area of commercial housing in 30 key monitored cities fell by 58% and 18% year-on-year and month-on-month respectively, and transactions were generally dismal.
Kerui, a real estate big data application service provider, said that the authorities’ rescue of the market has limited effect, and it is difficult to reverse the continued downward trend of the market in the short term.
Reuters reported on May 16 that real estate investment in China fell 10.1 percent in April from a year earlier, up from a 2.4 percent drop in March. National property investment in the January-April period fell by 2.7% year-on-year, while the first three months saw a slight increase of 0.7% year-on-year.
Analysis: It is difficult to save the property market under the epidemic prevention policy
At the Politburo meeting chaired by Xi Jinping on April 29, although it was mentioned to minimize the impact of the epidemic on economic and social development, it still insisted on a dynamic clearing.
The outlook for the real estate industry remains bleak as authorities in dozens of cities, including Shanghai, continue to take draconian measures to prevent and control the epidemic.
The Reuters report quoted Lu Ting, chief China economist at Nomura, as saying that with no prospect of unblocking in sight, a small reduction in lending rates did not provide much support for first-time homebuyers.
Lu Ting also said that uncertainty, lack of confidence, rising unemployment, and declining incomes all contributed to the decline in new home sales.
The financial self-media “Financial Business World” believes that one of the major reasons for the sluggishness of China’s real estate market is the “epidemic” factor. To be precise, it should be the CCP’s strict closure and control measures, which have impacted all aspects of people’s lives. The CCP’s strict “zeroing” policy has already made many people unemployed, unable to afford mortgages, and a large number of bankers have emerged. Therefore, while the CCP insists on “zeroing out” and does not relax, it is now trying to untie the real estate market. It is just like a “stability maintenance” in the Chinese real estate market, giving companies and the public a respite for the “leeks”. The purpose of the opportunity is to continue to have “leek” cutting in the future.
Responsible editor: Li Muen#