Fengkou Think Tank | The month-on-month decline in new and second-hand housing prices narrowed, and the industry expects to "additionally address the problem of the property market downturn"
2024-08-16
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On August 15, the National Bureau of Statistics released the latest real estate data.
In July, the sales prices of commercial housing in 70 cities continued to fall, and the number of cities where prices of new and second-hand houses fell month-on-month increased further.
At the same time, entering the traditional off-season, commercial housing sales in July also weakened, and development investment data showed that real estate investment confidence was still hovering at the bottom. However, under the influence of a series of policies, the year-on-year decline in sales and sales area of newly built commercial housing in the first seven months continued to narrow.
As the real estate market continues to adjust, how will the real estate easing policy be strengthened in the next stage? When will the real estate market bottom out and rebound?
The month-on-month decline in new and second-hand housing prices narrowed
On August 15, the National Bureau of Statistics announced the changes in the sales prices of commercial housing in 70 large and medium-sized cities in July.
In terms of new residential homes, except Shanghai, Xi'an, Taiyuan and Jilin, new home prices in 66 cities fell month-on-month; except Shanghai and Xi'an, new home prices in 68 cities were lower than the same period last year.
"Overall, the trend of new home prices in July is still 'mainly falling', the number of cities with a month-on-month decline is still at a historical high level, and the bottom adjustment trend of prices has not changed." Guan Rongxue, senior analyst at Zhuge Data Research Center, analyzed.
It is worth noting that in July, the average month-on-month decline in new home prices in 70 cities was -0.65%, a decrease of 0.03 percentage points from the previous month, continuing the slight narrowing trend of the previous month.
Image source: National Bureau of Statistics
In terms of second-hand housing, except Beijing, Shanghai and Kunming, second-hand housing prices in 67 cities fell month-on-month; second-hand housing prices in 70 cities were all lower than the same period last year.
In terms of average increase or decrease, in July, the average month-on-month decline in second-hand housing prices in 70 cities was -0.8%, narrowing by 0.05 percentage points from the previous month.
Image source: National Bureau of Statistics
In this regard, Guan Rongxue said that the number of cities where second-hand housing prices fell month-on-month in July further increased, and combined with the slight narrowing of the overall month-on-month decline, current second-hand housing prices are consistent with new housing prices, both showing a bottoming trend that has not changed, and the downward trend is gradually stabilizing. The current sentiment of rapid price decline has passed.
Yan Yuejin, deputy director of Shanghai E-House Real Estate Research Institute, clearly stated that "the current second-hand housing price index has shown a positive narrowing trend compared with June."
However, it should be noted that the decline is only narrowing, and the overall growth is still negative. As of July this year, the year-on-year decline in new home prices in the 70 cities has lasted for 28 months, while the year-on-year decline in second-hand home prices has lasted for 30 months.
Liu Aihua, spokesperson, chief economist and director of the Department of Comprehensive Statistics of the National Economy of the National Bureau of Statistics, said at a press conference held by the State Council Information Office that in July, the decline in some real estate-related indicators in my country continued to narrow, but at the same time, it should be noted that most real estate indicators are still declining and the real estate market is still in the process of adjustment.
The other side of the continued decline in housing prices is the sluggish situation on the sales and investment sides.
According to data released today by the National Bureau of Statistics, in the first seven months of this year, the sales area of newly built commercial housing nationwide was 541.49 million square meters, a year-on-year decrease of 18.6%, and the decline narrowed by 0.4 percentage points from the previous month; the sales of newly built commercial housing was 533.3 billion yuan, a decrease of 24.3%, and the decline narrowed by 0.7 percentage points.
Image source: National Bureau of Statistics
The month-on-month decline in commercial housing sales data in the first seven months narrowed, which is the result of the continued effect of a series of policies and the weakening of the high base effect of the same period last year. But overall, the new home market transaction has shown a downward trend since the beginning of this year, and the overall transaction performance is weaker than the same period last year.
Judging from the data for a single month, real estate market transactions in July did not continue the month-on-month increase in June. The sales area and amount in July decreased by 44.7% and 46.0% month-on-month respectively.
Wang Xiaoqiang, chief analyst of Zhuge Data Research Center, said that overall, as the policy effect has weakened and the traditional off-season has arrived, the new housing market is still facing great adjustment pressure. In terms of second-hand housing, the second-hand housing market in core cities continues to "trade volume with price", and the market transaction remains active. The second-hand housing transaction in Beijing, Shanghai, Shenzhen, Hangzhou, Chengdu and Suzhou in July increased significantly year-on-year, among which the transaction volume in Beijing and Chengdu in July was the highest monthly level in the past year.
The investment side continued to be sluggish. From January to July, the national real estate development investment was 6087.7 billion yuan, a year-on-year decrease of 10.2%, and the decline was 0.1 percentage point larger than that from January to June. Based on this calculation, the real estate development investment in July alone fell by 10.8% year-on-year, and the decline was 0.7 percentage points larger than that in June.
Image source: National Bureau of Statistics
“More efforts should be made to solve the problem of declining property market”
As the real estate market continues to adjust, the market is more concerned about the direction of real estate in the next stage.
From a policy perspective, since July, the central government has continued to stabilize confidence in the real estate industry.
From July 15 to 18, the Third Plenary Session of the 20th CPC Central Committee was successfully held. The plenary session adopted the "Decision of the CPC Central Committee on Further Deepening Reform and Promoting China's Modernization", which proposed "…supporting the diversified housing needs of urban and rural residents. Fully empowering city governments with the autonomy to regulate the real estate market…"
On July 22, the central bank lowered the 1-year and 5-year LPR by 10 basis points each, to 3.35% and 3.85% respectively, further reducing the cost of home purchases;
On July 30, the Political Bureau of the CPC Central Committee meeting emphasized the need to "actively support the acquisition of existing commercial housing for use as affordable housing."
In addition, Pan Gongsheng, the governor of the central bank, recently said in an interview with CCTV News that in terms of real estate policies, the down payment ratio for mortgage loans has now been reduced to 15%, which is the lowest down payment ratio in history. The interest rate is also at a very low level. At the same time, we provide re-loans to help local governments acquire existing commercial housing for affordable and rental housing to digest the existing commercial housing.
At the same time, various regions continue to follow up on policy optimization. Guangzhou has relaxed purchase restrictions for residents from Hong Kong, Macao, Taiwan and foreigners, and there is no purchase restriction for residential properties with a construction area of more than 120 square meters; Beijing, Kunming and other places support "old for new"; Chengdu has relaxed the standards for identifying first homes, and those who do not own a home in the district, city or county where the proposed home is located will be recognized as the first home, etc.
Image source: Xinhua News Agency
The continued deepening of policy regulation will be conducive to the real estate market returning to healthy and stable development.
Xu Yuejin, deputy director of research at China Index Academy, said that in the short term, the pace of housing system reform and policy optimization is expected to accelerate further. The city-specific policy will be further implemented, local governments will gain more autonomy in regulation, and there is still room for optimization of supply and demand policies in core cities in the future.
Xu Yuejin predicts that in the second half of the year, as the impact of the high base weakens, the year-on-year decline in new home sales nationwide will continue to narrow. At the same time, the implementation of the state-owned enterprises' stockpiling policy is also an important factor in determining the pace of market recovery.
As an important part of the national economy, the direction of real estate is closely related to the development of the national economy. Real estate is linked to more than 50 upstream and downstream industries. The downward trend in real estate investment will affect the balance sheet repair of residents and corporate sectors, as well as "confidence" issues.
On August 15, the National Bureau of Statistics also released economic data from January to July. In July, the added value of industrial enterprises above designated size increased by 5.1% year-on-year, down 0.2 percentage points from June; the month-on-month growth was 0.35%, down 0.7 percentage points from June, showing a short-term slowdown.
From January to July, the national fixed asset investment (excluding farmers) was 28,761.1 billion yuan, a year-on-year increase of 3.6%, 0.3 percentage points lower than that from January to June; excluding real estate development investment, the national fixed asset investment increased by 8%.
The National Bureau of Statistics said that in July, my country's economic operation was generally stable and made progress. However, we should also see that the adverse effects of the current changes in the external environment have increased, domestic effective demand is still insufficient, there are pains in the conversion of new and old drivers, and the continued recovery of the economy still faces many difficulties and challenges.
Wang Qing, chief macro analyst at Orient Securities, said that the meeting of the Political Bureau of the CPC Central Committee on July 30 continued to emphasize "lack of effective domestic demand". This shows that the key to stabilizing growth in the second half of the year is to effectively boost domestic demand, especially in the context of the possible weakening of external demand for economic growth in the second half of the year. Overall, the crux of the current macro-economy is still the continuous adjustment of the real estate industry, which is the root cause of insufficient effective domestic demand. In the second half of the year, it is necessary for the policy to support the development of new quality productivity while making greater efforts to solve the problem of the decline in the property market.
(Zhang Tingwang, a reporter from Dazhong News and Fengkou Finance)
