Under the influence of loose credit and local supportive policies, after the Spring Festival, the transaction activity of the second-hand housing market in many places has increased rapidly. Industry insiders predict that the credit support will be maintained in the later period, the local “stabilizing the property market” policy will follow up, and the potential supply and demand will increase and market expectations will improve.
The transaction volume of second-hand housing in many places rebounded rapidly in February. According to the data from the Shell Research Institute, the second-hand housing transaction volume in Shell 50 cities increased by about 4% month-on-month in February. Considering the Spring Festival holiday and the lack of natural days, the market recovery in February was obvious. Especially after the Spring Festival, the transaction volume rebounded rapidly. From February 7 to the end of the month, the average daily transaction of second-hand housing in Shell 50 cities increased by about 40% compared with the daily average in January, and exceeded the average daily level in December last year by about 10%.
In terms of cities, more than 40% of the 50 cities saw a month-on-month increase in transaction volume in February. Typical cities such as Xi’an, Tianjin, and Zhengzhou were affected by the epidemic in January. The concentrated release of housing demand in February drove second-hand housing transaction volume month-on-month. A substantial increase. Among them, the transaction volume in Xi’an was 9 times that of January, an increase of more than 20% compared with December last year; the transaction volume in Tianjin and Zhengzhou increased by more than 60% month-on-month.
At the same time, the price of second-hand housing stopped falling and stabilized month-on-month in February. Data show that the second-hand housing price index in the Shell 50 cities in February was the same as that in January, ending the continuous month-on-month decline since August last year, and the number of declining cities was reduced to 22. Among the first-tier cities, Beijing, Shanghai, and Guangzhou maintained a slight increase, with an increase of less than 1%; Shenzhen ended the month-on-month decline for six consecutive months since last August and turned to a slight increase. Among the second- and third-tier cities, Ningbo, Hangzhou, Shaoxing and other cities stopped falling and turned up in February; Tianjin, Xuzhou, Changzhou and other cities saw a smaller month-on-month decline.
In addition, the just-needed market is recovering quickly, supply and demand are active, and market expectations are improving. The data shows that in February, the number of customers in Shell 50 cities increased by about 10% month-on-month, and the number of newly listed houses increased by nearly 60% month-on-month. In terms of market expectations, the second-hand housing climate index of Shell 50 cities rebounded to 21 in February, and market expectations remained repaired. Among them, the core cities of the Yangtze River Delta urban agglomeration such as Shanghai and Hangzhou, and the southern coastal cities such as Xiamen and Quanzhou are expected to recover quickly, and the market sentiment index has rebounded to above 30; The prosperity index returned to a stable operating range above 20.
Regarding the main reasons for the rapid market recovery, the Shell Research Institute believes that credit easing and the introduction of local supportive policies are the main factors driving the market recovery. On the one hand, mortgage interest rates are further reduced, and banks lend faster. In February, the mainstream first-home loan interest rate in 103 key cities monitored by the Shell Research Institute was 5.47%, and the second-home loan interest rate was 5.75%, both down 9 basis points from the previous month, the largest drop in a single month since 2019. Among them, Beijing, Shanghai and other housing loan interest rates have fallen; in February, the average loan period in key 103 cities was 38 days, 12 days shorter than the previous month. Including Beijing and Shenzhen, nearly 40% of the cities have a loan period of less than one month. On the other hand, the density of local supportive policies (or actual implementation) has increased. After the holiday, cities or regions such as Shaoxing, Nanning, Heze, Ganzhou, Foshan (non-restricted purchases), and Nanxun District of Huzhou will reduce the down payment ratio, provide housing subsidies for talents, and relax settlement. Compared with the bailout policy on the supply side, the loose credit environment and the support policy on the demand side are more conducive to reducing the cost of housing purchases, which have a positive effect on boosting market confidence and releasing housing demand.
Since February, favorable policies for the property market have continued. According to statistics from the Central Plains Real Estate Research Institute, nearly 50 cities across the country have released various degrees of easing policies on the property market since the beginning of this year, including easing credit, attracting talents to subsidize house purchases, and reducing or exempting subsidized deed taxes. Among them, 15 cities have released different content to reduce the mortgage down payment policy.
Zhang Dawei, chief analyst of Centaline Real Estate, pointed out that it is expected that with the continuous easing of credit policies, the market is likely to have a “little spring” in March and April, especially in first- and second-tier cities.
Guosheng Securities predicts that the property market is expected to stabilize at a low level and gradually recover in the second quarter, and the strength of the recovery depends on the overall easing of policies.