© Reuters. Local governments intensively adjust property market policies; sales of new homes in 30 cities rebounded slightly in May
Financial Associated Press, June 5 (Reporter Wang Haichun) With the intensive adjustment of property market policies by local governments, the sales of new houses in many places increased month-on-month in May, but the market has not yet fully recovered.
According to CRIC’s monitoring data, in May, the transaction area of commercial housing in 30 key cities across the country was about 13.18 million square meters, an increase of 4% month-on-month and a year-on-year decrease of 59%. From January to May, the cumulative transaction area of the 30 cities was 69.36 million square meters, a year-on-year decrease of 51%.
In terms of prices, data from the China Index Academy shows that, due to the structural impact of some newly opened projects, the price of new residential buildings in 100 cities across the country in May rose slightly by 0.03% month-on-month and 1.2% year-on-year, but the prices of most projects remained flat or launched price reductions. The number of cities with a month-on-month decline was 45, an increase of 28 over the same period last year.
In terms of the second-hand housing market, according to data from the China Index Academy, the average price of second-hand housing in 100 cities in May was 16,030 yuan per square meter, a slight decrease of 0.01% month-on-month and a year-on-year increase of 1.39%.
Moody’s analysts believe that since April, various localities have taken measures such as easing restrictions on sales and purchases, reducing the down payment ratio and increasing the loan amount for home purchases. As home buyers face fewer policy restrictions and banks have more access to new home loans, the moves will support real estate demand and help narrow the decline in sales nationwide.
“It will take some time for the policy effect to really show up,” said Zhou Yiwei, an analyst at Moody’s.
According to Craig, in May, 20 cities across the country eased purchase restrictions, 25 cities eased loan restrictions, 14 cities eased sales restrictions, and another 16 cities introduced measures to reduce or exempt real estate transaction taxes and fees, and 22 cities had land purchase subsidies.
Yang Kewei, deputy general manager of the Crane Research Center, said that local governments have increased the frequency and intensity of policy adjustments, and weak second-tier and third- and fourth-tier cities are expected to fully release restrictive policies such as purchase restrictions and sales restrictions in the future. Affected by this, the real estate market is expected to recover gradually.
From a month-on-month perspective, the transaction volume of new houses in second- and third-tier cities in May rose more than the previous month. CRIC data shows that in cities such as Changchun, Foshan, Xuzhou, Nanning, Suzhou, Dalian, Wuhan, Qingdao, Wuxi and other cities that introduced loose policies in the early stage, the volume of new house transactions in May increased by more than 25% month-on-month; among them, Foshan was affected by the core cities. Influenced by the positive impact of Guangzhou’s recovery, the transaction area of commercial housing in May rose by as much as 70% month-on-month.
In terms of inventory, the inventory digestion cycle in key cities has been shortened. Such as Nanning, Dalian, Dongguan, Qingdao, Changsha and other cities, the inventory digestion cycle at the end of May was shortened by more than 10% from the previous month. However, there is still a lot of pressure on inventory depletion in 30 cities. Except for a few cities such as Hefei, Nanjing, Chongqing, Jinan, and Ningbo, the inventory depletion cycle in other cities is still more than 18 months.
Cao Jingjing, general manager of the Index Division of the China Index Academy, believes that from the perspective of policy trends, local governments may further adjust policies based on city-specific policies.
“First-tier cities are expected to focus on fine-tuning policies. Second-tier cities tend to increase the number of houses purchased by households with registered households by means of relatives, families with multiple children, and lease replacement. Non-registered households can activate effective demand by shortening social security or individual tax years.” Cao Jingjing said.