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| Friday, August 16, 2024 |

NO.1 The area of ​​commercial housing for sale nationwide increased to about 740 million square meters

On August 15, the National Bureau of Statistics released data showing that in the first seven months of this year, the national real estate development investment was 6087.7 ​​billion yuan, a year-on-year decrease of 10.2%, of which residential investment fell by 10.6% to 4623 billion yuan; the sales area of ​​new commercial housing was 541.49 million square meters, a year-on-year decrease of 18.6%, of which residential sales area decreased by 21.1%; the sales of new commercial housing was 5333 billion yuan, a decrease of 24.3%, of which residential sales decreased by 25.9%. At the end of July, the national commercial housing area for sale was 739.26 million square meters, a year-on-year increase of 14.5%, of which residential area for sale increased by 22.5%.

Comments:The decline in real estate investment and sales data in the first seven months reflects the far-reaching impact of the current real estate market regulation policy and the pressure of the market to reduce inventory. Developers are facing greater financial pressure, and home buyers are more cautious. The increase in the area for sale also means that the contradiction of oversupply in the market will become more prominent, and the operating strategy and market expectation management of real estate companies will be more critical in the future.

NO.2 In July, the number of cities with falling housing prices continued to increase in 70 cities

On August 15, the National Bureau of Statistics released data showing that in July, among the 70 large and medium-sized cities, the prices of new and second-hand houses decreased in 66 and 67 cities respectively, an increase of 2 and 1 respectively from the previous month. Among them, only two cities, Shanghai and Xi'an, saw an increase in new house prices, and only one city, Shanghai, saw an increase in second-hand house prices. In addition, the year-on-year decline in second-hand house prices in first-tier cities has narrowed for two consecutive months. It is worth noting that the month-on-month increase in new house prices in Shanghai has ranked first in the country for five consecutive months, and the price of second-hand houses has risen for two consecutive months this year, and the increase is also the highest in the country.

Comments:This reflects that the adjustment pressure of China's real estate market is still great, and market expectations are becoming cautious. It is particularly noteworthy that first-tier cities, such as Shanghai, have seen house prices rise against the trend, which may be related to the city's own scarce land resources and strong economic appeal. But overall, the real estate market is still in a downward cycle.

NO.3 Chengdu encourages housing "old for new" through housing vouchers

On August 15, the Chengdu Municipal Housing and Urban-Rural Development Bureau issued a notice to carry out the housing "old for new" work. The notice proposed to support the district (city) and county governments (management committees) to encourage housing "old for new" by giving financial subsidies (including fixed subsidies, all or part of the deed tax subsidies, value-added tax subsidies), issuing consumer coupons, etc. to buyers who sell their own houses and buy new commercial houses within 6 months, or sell their original own houses within 12 months after purchasing new commercial houses before December 31, 2024. The specific standards and implementation time shall be determined by each district (city) and county. In addition, the district and county governments are supported to adopt diversified methods for demolition and resettlement, and encourage the promotion of housing "old for new" through the form of "housing tickets". In addition, the district and county governments are supported to adopt diversified methods for demolition and resettlement, and encourage the promotion of housing "old for new" through the form of "housing tickets".

Comments:Chengdu's policy is an effective incentive for the "old for new" demand, which will help promote transaction volume and liquidity, reduce residents' replacement costs, and have a positive impact on Chengdu's real estate market in the short term, especially boosting new home sales and second-hand home transactions with upgraded functions. However, differences in implementation details and subsidy intensity among different districts may affect the policy's effectiveness, and attention should be paid to issues of execution and fairness.

NO.4 Popular plots in ShanghaiAssignmentImplementing "Double High and Double Competition"

On August 15, the Shanghai Municipal Planning and Natural Resources Bureau issued a notice. After research by the Shanghai Municipal Planning and Resources Department together with the Housing and Urban-Rural Development, Housing Management and other departments, starting from the fifth batch, Shanghai’s commercial housing land transfer will implement a “double high, double competition” (two rounds of bidding, two rounds of bidding for high-quality construction standards) approach for plots with higher market popularity. That is, after the bidding completes the previous indicator requirement, it will move on to the next indicator requirement and adopt a gradient competition approach to ultimately achieve the goals of “one plan for one plot of high-quality construction” and “market-based allocation, the highest bidder wins”.

Comments:Shanghai's "double high and double competition" policy is mainly aimed at effectively improving the efficiency of land resource allocation, ensuring high-standard land transfer and the steady development of the real estate market. This measure can further promote the improvement of the quality of commercial housing construction and drive real estate companies to transform to high quality. However, high cost investment may compress corporate profit margins and increase market entry barriers. Small and medium-sized real estate companies will face greater competitive pressure.

NO.5 Longfor Group's project company received HK$8.2 billion in refinancing

On August 15, Longfor Group announced that Qiwan (Hong Kong) Investment Co., Ltd., the project company in which the company holds a 50% stake, has successfully obtained a refinancing of HK$8.2 billion. The loan has been used to repay the loan of the Kaiyue project under the project company. The Kaiyue project is an important overseas asset of the company. The successful refinancing of the Kaiyue project is crucial to the company's overseas restructuring. The company will actively and continuously promote the overall overseas restructuring.

Comments:This shows that its capital chain situation has been alleviated, which is a positive signal for the financing difficulties currently faced by real estate companies. This move is conducive to maintaining the operational stability of the company's overseas assets and also paves the way for subsequent restructuring. However, the high financial costs may affect the company's profit level to a certain extent.

Daily Economic News