[The Epoch Times, December 18, 2022](Reported by Epoch Times special feature reporter Li Siqi) Chinese real estate continued to decline, and the sales of the top 100 real estate companies in the first 11 months fell by as much as 42.1% year-on-year. Chinese Vice Premier Liu He said on December 15 that real estate is a pillar industry of the national economy and that new policies are being considered to help the real estate market. According to the analysis of professionals, the policy effect will not be great, because it is difficult to restore market confidence.
Regarding the direction of China’s economy and real estate market, Vice Premier Liu He said in his speech at the fifth round of China-EU business leaders and former senior officials’ dialogue on December 15 that real estate is a pillar industry of the national economy. Downside risks, some policies have been introduced and new policies are being considered in order to affect market expectations and confidence.
Liu He also claimed that China’s urbanization is still in a relatively rapid development stage, and there is room for demand to support the real estate market. However, the CCP’s official media “First Finance and Economics” reported on more than 20 localities encouraging farmers to buy houses in cities a week ago, saying that experts believe that the “demand for farmers to buy houses has decreased significantly.”
As the pillar industry of China’s economy, the real estate industry is often regarded as a barometer of the economy. In the real estate market information for the first 11 months released by the Statistics Bureau of the Communist Party of China on December 15, the statistical data all showed a year-on-year decline.
For example, the national real estate development investment fell by 9.8% year-on-year, of which residential investment fell by 9.2% year-on-year; the housing construction area of real estate development enterprises decreased by 6.5% year-on-year, of which the residential area fell by 6.7%. The area of newly started housing fell even more, at 38.9%, of which the newly started area of residential buildings fell by 39.5% year-on-year; the area of completed housing fell by 19.0% year-on-year, of which the area of completed residential buildings fell by 18.4%.
Regarding whether the CCP’s new policies can stimulate the sluggish real estate market, Hong Kong financial analyst Jiang Tianming told The Epoch Times on December 17: “Real estate policies are unlikely to be effective, because the confidence of home buyers may not be restored quickly. .” She believes that this involves three major reasons.
“First of all, the economy is sluggish. Home buyers, especially those who buy houses with loans, are confident that they have the ability to repay their mortgages in the next decade or decades. But in the economic downturn Under the circumstances of declining enterprise production, declining market demand, and high youth unemployment rate, it is difficult for house buyers to have the confidence to carry a mortgage that lasts for more than ten years or decades.”
“The second reason is the lack of integrity in the market. Many pre-sale properties cannot be completed on time, and people who buy unfinished houses have nowhere to complain. It is difficult for home buyers to have confidence when developers have no integrity and regulatory authorities do not act. .”
“Third, housing prices are falling. The decline in housing prices in China will bring about a decline in confidence. This is the mentality of ‘buy up but not down’.”
In November, the sales prices of commercial housing in various cities in China fell month-on-month. According to data from the Statistics Bureau of the Communist Party of China on December 15, the sales price of commercial housing in first-tier cities fell slightly from the previous month, and the decline in second- and third-tier cities was the same as last month or slightly narrowed.
The China Index Research Institute (China Index Research Institute) made a brief summary of the sales data of commercial housing in November: the sales area and value of commercial housing nationwide in November fell by more than 30% year-on-year, and the decline was 10.0 and 8.5 percentage points higher than that in October; the first 11 months The cumulative year-on-year decline is still more than 20%, and the decline has expanded. Its “2022 January-November China Real Estate Enterprise Sales Performance Ranking” shows that the sales of the top 100 real estate enterprises in the first 11 months fell by as much as 42.1% year-on-year.
The interpretation of the China Finger Research Institute is that although the Chinese Communist Party’s regulatory authorities have issued a number of policies to stabilize the real estate market, “residents’ willingness to buy houses is low” and the impact of the epidemic, “multiple policies have not yet reversed the market downturn”; The financing sources of high-end real estate companies are expected to improve, but in the short term, “factors that affect residents’ income expectations and house price expectations have not yet been significantly restored.” It will take time for the market to stabilize, so that buyers will change their wait-and-see sentiment.
Responsible editor: Lian Shuhua#