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Reporter of China Business Network: Chen Li Editor of China Business Network: Wei Wenyi

On August 15, the National Bureau of Statistics released data showing that 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%; the sales volume of newly built commercial housing was 533.3 billion yuan, a year-on-year decrease of 24.3%. Among them, residential sales fell by 25.9%. At the end of July, the area of ​​commercial housing for sale was 739.26 million square meters, a year-on-year increase of 14.5%. Among them, the area of ​​residential housing for sale increased by 22.5%.

According to the latest report from Shanghai E-House Real Estate Research Institute (hereinafter referred to as E-House Research Institute), in July, the transaction area of ​​newly built commercial housing in 50 key cities across the country was 11.41 million square meters, a decrease of 26% from the previous month and 13% from the previous year. It is worth mentioning that the transaction area of ​​newly built commercial housing in Nanning, Fuzhou, Guangzhou, Nanjing and Chongqing all achieved positive year-on-year growth in July.

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The reporter of Daily Economic News noted that in February this year, the year-on-year growth rate of the transaction area of ​​new commercial housing in 50 key cities across the country was -69%, and the decline rate index in subsequent months generally showed a trend of narrowing month by month. Currently, this index has narrowed for five consecutive months. In total, the year-on-year growth rate of the cumulative transaction area in the first three months was -48%, and in the first seven months it narrowed to -38%, and the year-on-year decline curve narrowed.

"It is expected that the number of cities where new home transaction volume will turn positive year-on-year in August will increase, which will further promote the adjustment of market expectations." The E-House Research Institute analyzed that the overall trend in the same period last year was cooling down. The continued increase in housing purchase policies in the second quarter of this year released positive effects. At present, the period of greatest sales pressure on new homes has passed, and there is a trend of bottoming out and warming up.

The decline in new home sales volume continues to narrow

According to a report from the E-House Research Institute, in July, the transaction areas of newly built commercial housing in 50 first-, second-, third- and fourth-tier cities across the country were 2 million square meters, 6.13 million square meters and 3.28 million square meters, respectively, with month-on-month growth rates of -19%, -31% and -21%, and year-on-year growth rates of -1%, -19% and -8%, respectively.

From the first seven months, the transaction area of ​​newly built commercial housing in 50 first-tier, second-tier, third-tier and fourth-tier cities across the country was 12.47 million square meters, 44.90 million square meters and 25.17 million square meters, respectively, with year-on-year growth rates of -28%, -41% and -38%, respectively. The current sales data generally shrank by 30% compared with the same period last year, and shrunk by 20%, 60% and 65% compared with 2019.

In this regard, E-House Research Institute believes that the real estate market in first-tier cities is more resilient, while the market adjustment pressure in second- and third-tier cities is relatively large. Local governments should further strengthen housing purchase policies based on the degree of such shrinkage to better boost transaction conditions.

The reporter noted that although the overall new home sales volume declined in July, three cities, including Fuzhou, Nanjing and Chengdu, still saw positive month-on-month growth among the 22 cities nationwide; the new home sales area in five cities, including Nanning, Fuzhou, Guangzhou, Nanjing and Chongqing, all achieved positive year-on-year growth. Among them, Nanjing and Fuzhou both achieved year-on-year and month-on-month growth in July.

Take Nanjing as an example. On July 5, Nanjing cancelled the notarized lottery sales requirement for commercial housing projects that had been in place for seven years, and developers were allowed to sell the houses independently. On the same day, the Nanjing Housing Provident Fund Management Center issued a notice to adjust the housing provident fund loan quota for families with many children, and the maximum loan amount for new housing provident fund loans increased by 20%, that is, 600,000 yuan for individuals and 1.2 million yuan for families. Combined with the gradual release of the policy effects of reducing the down payment ratio and lowering the provident fund and commercial loan interest rates, the transaction volume of new houses in Nanjing has steadily increased since June.

According to CRIC data, the transaction area of ​​new homes in Nanjing reached 403,900 square meters in July, up 11.80% from 361,300 square meters in the same period last year; the price of new homes returned to the "3-digit" level after a lapse of 9 months. Affected by the concentrated filing of luxury homes in July, the overall average price rose to 31,588 yuan per square meter.

As the sales velocity of commercial housing increases, the inventory of commercial housing continues to decline. By the end of June, the saleable area of ​​commercial housing in Nanjing was 6.5389 million square meters, and the sales cycle was 17.91 months. By the end of July, the saleable area of ​​commercial housing in Nanjing dropped to 6.3726 million square meters, and the sales cycle was further reduced to 17.86 months. The sales cycles of Jiangbei New District, Xuanwu District, Jiangning District, Pukou District and Liuhe District were all less than 18 months, and the sales cycles of Qinhuai District, Gulou District and Yuhuatai District were all less than 14 months.

Guangzhou is the only city among the four first-tier cities where new home sales have increased year-on-year. Since the introduction of the "May 28 New Policy", confidence in the Guangzhou property market has been rebuilt at an accelerated pace. Although the marginal effect of positive factors has gradually weakened and the traditional off-season has arrived, the transaction atmosphere in the Guangzhou property market has declined, but it is still at a high level.

According to CRIC statistics, due to the traditional off-season in July and August, the number of new properties launched in Guangzhou in July decreased significantly, and the inertia of supply and demand fell. The first-hand residential transactions in the month were 5,134, a decrease of 33% month-on-month, but an increase of 11% year-on-year, better than the same period last year. "The overall performance of the Guangzhou property market is within expectations, and it is expected to remain stable in August. The next marketing node will be the 'golden September and silver October'." CRIC analysis pointed out.

Xu Yuejin, deputy director of research at China Index Academy, analyzed that from the data, at the national level, due to the weakening of the high base effect, the year-on-year decline in sales and sales area of ​​newly built commercial housing from January to July continued to narrow. Overall, as the policy effect has weakened and the traditional off-season of the market is approaching, the new housing market is still facing great adjustment pressure.

The luxury housing market in Beijing, Shanghai and Shenzhen is hot

It is worth noting that in July, the luxury housing market in many cities ushered in a new wave of boom.

The report shows that in July this year, the number of new homes sold with a total price of 20 million yuan or more in Beijing, Shanghai and Shenzhen was 500, a decrease of 49% from the previous month and an increase of 28% from the previous year. The number of luxury home transactions in these three cities from 2019 to the first seven months of 2024 was 2,371, 2,275, 3,397, 4,085, 3,795 and 4,418 respectively. This also shows that luxury home transactions in the above three cities have been the hottest in the past five years.

Taking Shanghai as an example, July entered the traditional off-season for the real estate market. The activity of Shanghai's luxury housing market declined, the supply of new homes slowed down, and the supply volume fell sharply month-on-month. The overall transaction volume and price fell month-on-month.

However, according to CRIC data, in the first half of the year, the total number of online signed units in 23 luxury housing projects in Shanghai was 3,972. Among them, 1,544 high-end projects with a total price of more than 30 million yuan were sold, an increase of 221% year-on-year, and the transaction scale was the highest in the past decade. In terms of supply, in the first half of the year, Shanghai cumulatively supplied 23 high-end projects with an average unit price of more than 100,000 yuan per square meter, of which 20 projects had a sales rate of more than 70% on the first day of opening.

For example, on March 28, the day when the China Overseas Shunchang Jiuli project was launched, it set a record for the highest single launch of commercial housing in the country with sales of 19.653 billion yuan; on June 24, the China Overseas Shunchang Jiuli style villa obtained a certificate and entered the market, setting a new historical high for the average price of new homes in Shanghai at 298,000 yuan per square meter, and the 49 units were quickly sold out when they were first launched.

As real estate developers' mid-year performance sprint came to an end, the Shanghai market showed a cyclical decline in July. The entry of luxury homes into the city slowed down, and there were no hot projects to boost overall activity. Both supply and demand fell, and the enthusiasm was clearly differentiated.

In August, there are still many luxury housing projects in Shanghai ready to go. In addition to the second phase of Sunac Bund One Courtyard, which has completed the subscription, there are also Qiantan Lily Garden and Jinyuan, with unit prices exceeding 170,000 yuan per square meter. In addition, in the fourth batch of land auctions in Shanghai that ended on August 7, the former Xiaomi headquarters site was acquired by Greentown at a floor price of over 130,000 yuan per square meter, becoming the "land king" in the country in terms of unit price.

"It is expected that destocking will remain the main policy axis for some time to come." Tongce Research Institute analyzed that as macroeconomic policies are gradually implemented in the second half of the year to stabilize market expectations, Shanghai's gradual release of loose real estate policies may once again stimulate the market to release a wave of demand.

"The hot transactions of luxury homes are due, on the one hand, to the strong risk aversion sentiment among funds. The scarcity of luxury homes, their potential for value preservation and appreciation, and their ability to meet improved living needs have attracted more funds. On the other hand, real estate developers currently developing luxury homes have a calmer mentality and are less likely to hold back on their properties, while they are more inclined to rush and speed up the clearance of projects." In the view of the E-House Research Institute, this further confirms the positive trend of the real estate market and will also help relevant real estate developers to speed up the recovery of funds and improve their cash flow.

Regarding the future market development, E-House Research Institute said that the current market adjustment in 50 key cities across the country is relatively sufficient, and in the process of subsequent policy guidance, supply and demand relations and housing price adjustments, the foundation for continued recovery is relatively good. "In August, it is expected that the number of cities with year-on-year positive new home transactions will increase, which will have a very good effect on the adjustment of market expectations."

Daily Economic News