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Zhitong Finance APP learned that on August 12, China Index Academy issued a document stating that, overall, the current second-hand housing market in core cities is still in the process of volume expansion. Among them, the prices of old and dilapidated houses in some core cities have been adjusted to the psychological expectations of customers with just-in-time needs. These houses have relatively high cost-effectiveness and are an important support for the activity of the second-hand housing market. In the short term, the game between supply and demand will continue, and the second-hand housing market as a whole may continue the trend of "trading price for volume"; but at the same time, second-hand houses have diverted the new housing market, and the new housing market is still facing great downward pressure in the short term. It will still take time for the "property market to bottom out."

Since the 5.17 new policy, the real estate market in key cities has shown signs of improvement. Entering July, as the policy effect has weakened and the traditional off-season of the market has arrived, new home transactions have fallen again, but the second-hand housing market in core cities has maintained a certain degree of activity. Based on the recent trend of second-hand housing data, China Index Academy analyzed the market characteristics.The main conclusions are as follows:

1. The second-hand housing market in key cities continued the trend of "trading price for volume", and the transaction volume maintained a certain scale. In July, the second-hand housing transaction volume in Beijing and Chengdu hit a monthly high in the past year.

2. With the entry of customers with urgent needs, the number of second-hand houses sold below 3 million yuan in Beijing and Shanghai in the second quarter increased significantly year-on-year and the proportion increased. The prices of low-priced and small-sized second-hand houses in the core areas have become attractive.

3. The increase in second-hand housing transactions in core cities shows that the pace of short-term housing demand entering the market has accelerated under the policy, but the new housing market is still under pressure, which reflects that the replacement transmission effect between the second-hand housing market and the new housing market has weakened and the substitution effect has increased. It has been nearly three months since the 5.17 policy was implemented. Whether the second-hand housing market can continue to have high transactions in August remains to be seen. The bottoming trend of the new housing market is expected to continue in the short term.

The second-hand housing market in key cities continued the trend of "trading price for volume", and the transaction volume remained at a certain scale

According to the China Index data, from January to July 2024, 590,000 second-hand residential houses were sold in 15 key cities, a year-on-year decrease of 2.8%. In July, 99,000 houses were sold, a month-on-month increase of 2.9% and a year-on-year increase of 42.5%. In terms of price, according to the China Index 100 City Price Index, in July 2024, the average price of second-hand residential houses in 100 cities fell by 0.74% month-on-month, which has fallen for 27 consecutive months and fell by 6.58% year-on-year.

In terms of cities, in July, second-hand housing transactions in most cities increased year-on-year, with Shenzhen and Hangzhou increasing by more than 100%, and Beijing and Yantai increasing by more than 50%. Among them, Beijing and Chengdu's transaction volumes in July were both the highest monthly levels in the past year. Although Shanghai's second-hand housing transaction volume fell month-on-month, it still remained at a high level. Cumulatively, from January to July, Shanghai, Shenzhen, Hangzhou, Qingdao, and Haikou increased year-on-year, while the remaining cities still decreased year-on-year. In terms of price, second-hand housing prices in key cities fell year-on-year. In the short term, the trend of exchanging price for volume in the second-hand housing market will continue.

As rigid-need customers enter the market, the transaction volume of properties below 3 million in Beijing and Shanghai increased significantly in the second quarter

Second-hand houses are more in line with the rigid demand characteristics of customers with rigid demand, such as "low total price and immediate occupancy". As the prices of second-hand houses continue to fall, the cost-effectiveness of second-hand houses begins to emerge, and customers with rigid demand in some core cities such as Beijing and Shanghai begin to enter the second-hand housing market.

Beijing:In the second quarter of 2024, the transaction volume of second-hand houses below 3 million yuan increased by 51.1% year-on-year

Beijing's June 26 new policy has a significant driving effect on the market. In July, the number of second-hand residential transactions reached 15,575, up 3.9% and 60.3% year-on-year respectively. Second-hand residential prices fell by 0.87% month-on-month, a decrease of 0.03 percentage points from June, gradually showing signs of bottoming out. In terms of transaction structure, low-priced housing transactions performed relatively well. In the second quarter of 2024, Beijing's second-hand residential transactions below 3 million yuan increased by 51.1% year-on-year, and the proportion increased by 9.0 percentage points to 30.8% compared with the same period last year.

Shanghai:In the second quarter of 2024, the transaction volume of second-hand houses below 3 million yuan increased by 90.7% year-on-year

In July, the Shanghai market continued the trend of "trading price for volume", with second-hand housing prices falling by 0.88% month-on-month, a 0.13 percentage point increase from June; 17,792 second-hand residential units were sold, down 24.1% month-on-month, but the absolute value was still at a high level in the past year, up 45.5% year-on-year. In terms of transaction structure, after the 5.27 new policy in Shanghai, the demand for housing purchases by singles within the outer ring was further released, and the attention to "old, broken and small" houses with high cost performance increased. In the second quarter of 2024, the transaction volume of second-hand houses below 3 million yuan increased by 90.7% year-on-year, and the proportion increased by 13.3 percentage points from the same period last year to 40.7%.

Second-hand housing has diverted the new housing market, and the new housing market may still be under pressure in the short term

Judging from the transactions in key cities, from January to July 2024, the second-hand housing market generally performed better than the new housing market: second-hand housing in Shanghai, Shenzhen, Hangzhou and Qingdao all increased year-on-year, while new housing decreased year-on-year; the cumulative decline in second-hand housing in Beijing, Nanjing, Chengdu and Foshan was about 10%, and the cumulative decline in new home sales exceeded 30%.

At present, the replacement transmission effect between the second-hand housing market and the new housing market has weakened, while the substitution effect has strengthened, which has diverted some housing demand. The reasons are: first, the supply structure of new houses has affected. After years of development, the transaction volume of second-hand houses in many core cities has exceeded that of the new housing market, and the supply of new houses has gradually suburbanized. For example, the proportion of new houses outside the Fifth Ring Road in Beijing and the Outer Ring Road in Shanghai is about 80%, while the transaction volume of second-hand houses is more concentrated in the core area. In the downturn of the market, residents are more inclined to purchase real estate in the core area; second, residents still have some concerns about the delivery of new houses, and prefer existing houses. Third, under the background of increasing pressure on economic operation and the expectation of downward housing prices, some owners have reduced the price of their houses to recover funds, and will no longer enter the new housing market for improvement in the short term, which has also weakened the transmission effect between the second-hand housing market and the new housing market.