Title: CICC Report Reveals Cooling Trend in China’s Second-Hand Housing Market, Urgent Need for Policy Boost
Date: [Current Date]
Source: China Business News
The latest research report from the China International Capital Corporation (CICC) indicates a considerable decline in the transaction volume and price of second-hand housing in July, emphasizing the urgent need for policy intervention to rejuvenate the market.
According to the report, the transaction volume of second-hand housing in July witnessed a significant drop of over 10% compared to the same period last year. Furthermore, the transaction price experienced an accelerated downward trend, suggesting a cooling market. The report states that the market temperature requires a boost from supportive policies.
In terms of quantity, the second-hand housing transaction volume index in July plunged by 16% compared to the previous month (a decrease of 7% was recorded in June) and dropped to -16% year-on-year (compared to a 10% increase in June). The annual average also dipped by 5%.
Concerning prices, the CICC homogeneous second-hand housing transaction price index in July expanded to -2.3% month-on-month (compared to a -1.8% decrease in June). Since the beginning of the year, house prices have fallen by 1.9% (compared to a 0.5% increase in the first half of 2023). The report also highlights a new high of 4.71% for transaction bargaining room, which represents an increase in negotiation flexibility.
Overall, the stock housing market showed significant signs of cooling in July. The report emphasizes that the prospect of market stabilization and recovery hinges on the successful implementation of demand-side support policies across different regions following the Politburo meeting.
The report also reveals that the number of second-hand housing listings remained stable in July, with listing prices slightly declining. However, sellers anticipate a slight improvement towards the end of the month due to policy influence. Among the key cities monitored, Dongguan, Jinan, and Qingdao experienced listing volume increases of more than 4%. The listed price index for CICC’s homogeneous second-hand residential buildings witnessed a 1.0% decrease from the previous month (compared to a 1.3% decrease in June). This resulted in a price adjustment range for listed prices declining by 17 basis points to -3.07% month-on-month, hitting a level similar to October 2021.
In July, residential rents continued to show slight month-on-month growth, aligning with the peak season characteristics of the rental market. CICC’s homogeneous listing rent index increased by 0.4% from the previous month, while the waiting period remained relatively flat at 2.23 months, similar to the same period last year. The rental market has benefitted from increased demand driven by the graduate group.
The report concludes that since the second quarter of this year, both the market volume and prices of second-hand housing have been on a downward trajectory. To revive the market, it highlights the significance of demand for housing and loans in different regions, as well as the implementation of supportive policies decided upon at the Politburo meeting.
The report reminds readers that the restoration of fundamentals and policy implementation may not always align with expectations, and cautions against accelerated deterioration of real estate company credit.
This article was originally published in China Business News. Please note that Oriental Fortune disseminates this content for information purposes only and does not endorse it as investment advice. Readers should proceed at their own risk.
Original title: CICC: The stock housing market continued to cool down in July, waiting for policy boost