Optimize and adjust the price limit policy to allow commercial housing to return to the market
2024-08-19
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Half-month talk on the property market
Our reporter Xia Jinbiao
Recently, Tianshui and Baiyin in Gansu have successively issued notices to cancel the price filing of newly built commercial housing to promote the stable and healthy development of the real estate market. Tianshui also stated that "the sales price will be adjusted in a timely manner by the developer according to the market sales situation." In addition to Tianshui and Baiyin in Gansu, Shenyang, Lanzhou, Zhengzhou, Ningde and other cities have also announced that they will no longer implement the sales price guidance for newly built commercial housing, that is, cancel the sales price limit. In addition, Yangjiang, Zhuhai, Wuhu and other cities have optimized the price limit policy, such as shortening the time interval for filing price adjustment and canceling the floor price difference limit. In fact, before the price limit policy for newly built commercial housing was adjusted, the price limit policy for second-hand housing had already begun to adjust.
The price limit policy for new and second-hand houses was introduced during the period of overheated real estate, dating back to 2010. At that time, the price limit policy mainly limited the excessively high registered prices of new houses, which was called the "price limit order". Due to the linkage effect between new and second-hand houses, after the price limit of new houses, if the price of second-hand houses is much higher than that of new houses, it may cause confusion in market expectations and lead to more speculative behavior. Subsequently, local governments began to implement the "price limit order" for second-hand houses to stabilize market expectations and avoid overheating of the market.
This round of real estate adjustments has put some places under downward pressure on the real estate industry, and the price limit policy has begun to shift from restricting the rapid rise in housing prices to restricting the rapid decline in housing prices. In August 2021, Yueyang, Hunan became the first city to issue a "price limit order", stipulating that the actual transaction price of commercial housing sales shall not be lower than 85% of the registered price. Subsequently, cities including Jiangyin, Tangshan, Shenyang, Heze, Kunming, Huizhou, and Guilin in Jiangsu also issued similar "price limit order" policies.
It should be said that the price limit policy for new and second-hand houses has played a certain positive role in stabilizing the real estate market. The price limit policy has curbed speculation in the real estate market, curbed the rapid rise or fall of housing prices, and helped prevent financial risks. However, it should be pointed out that the price limit policy may have a certain effect on curbing the rapid rise or fall of housing prices in the short term, but in the long run it may affect the positive role of the market mechanism, distort the supply and demand relationship in the market, cause distortion of housing price signals, affect buyers' expectations, and interfere with the normal sales of real estate companies. Especially in the downward phase of the real estate market, the "price limit order" restricts real estate companies from recovering funds through price cuts and promotions, increases the financial risks of real estate companies with tight capital chains, further exacerbates the liquidity crisis in the real estate market, and affects the stable and healthy development of the real estate market.
At present, the cancellation of the "price reduction limit order" in some places can allow real estate companies to adjust housing prices independently according to market conditions, quickly recover funds through price cuts and promotions, alleviate financial pressure, and thus increase market liquidity. For real estate companies, the cancellation of the "price reduction limit order" means greater autonomy and fewer policy constraints, which will help boost the confidence of real estate companies and promote their flexible adjustment of business strategies according to market changes. However, it should be noted that although the cancellation of the "price reduction limit order" can bring some positive effects to the real estate market, it may also be accompanied by certain risks, such as large fluctuations in housing prices in the short term may affect market stability. Therefore, local governments also need to optimize and adjust price limit policies according to their own real estate market conditions to ensure the stable and healthy development of the real estate market.
As my country continues to improve its "market + security" housing supply system, the government will increase the construction of affordable housing to ensure the housing needs of low- and middle-income people. At the same time, the market mechanism will play a greater role in meeting the diversified housing needs of residents, allowing commercial housing to return to the market and meet the personalized housing needs of people at different income levels through the commercial housing market. Administrative measures such as real estate price limits are expected to gradually withdraw from the market and be replaced by market-oriented and legalized long-term mechanisms.
