second-hand home owners are in a dilemma again. some are cutting their losses, while others are waiting.
2024-09-10
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since she decided to sell her house at the beginning of the year, zhang xin has been troubled by this because it is impossible to sell without lowering the price. zhang xin has an old, dilapidated and small second-hand house in her hometown in hebei. the listing price is not high, and she bids 700,000 yuan. although the house is old, it has convenient transportation and complete supporting facilities. she thought she could sell it quickly, but it seems that this matter is not so easy.
"500,000 yuan?" a buyer came up and bargained for 200,000 yuan, which shocked zhang xin. in the past six months, similar scenes have been repeated, and the agent asked her to lower the price several times. zhang xin didn't care at first, but after several months, there was no progress in selling the house, and her mentality was shaken. "if someone wants it for 500,000 or 600,000 yuan, just sell it quickly."
the above scenario is not uncommon in the current second-hand housing market. whether it is a high-priced house in a first-tier city or a low-priced house in a second- or third-tier city, if you want to sell it quickly, price cuts seem to be inevitable. the mentality of both buyers and sellers is also in a tug-of-war. the owners do not want to make a big loss, and the buyers are also waiting for a "lower price", and the transaction market has fallen into a slow pace.
the latest data released by the agency shows that the second-hand housing market in key cities has weakened in august. entering the traditional "golden september and silver october" of the real estate market, the market heat has not been significantly boosted, and the number of second-hand housing listings has remained high. the effects of multiple rounds of policies this year are weakening, and the industry believes that it is necessary to continue to adjust and support policies in the future.
anxious second-hand homeowners
the second-hand housing transaction market has become the "main battlefield" in the current real estate market.
according to statistics from the china index academy, from january to july 2024, the total transaction volume of new and second-hand houses in 25 representative cities in china decreased year-on-year, among which the proportion of second-hand housing transactions further increased to 64.1%.
the second-hand housing market is large in size and accounts for over 60% of transactions. more importantly, many second-hand housing owners currently "sell old" in order to "buy new". whether the second-hand housing transaction is completed or not is related to the operation of the entire replacement and improvement chain.
however, it is not easy to sell a second-hand house quickly no matter where you are. one important reason is that the overall stock of the second-hand housing market is large, and the number of listings in some cities is still increasing, which invisibly increases the difficulty of selling.
according to data from the linping residential big data research institute, the number of second-hand residential listings in 14 key cities reached 2.26 million in august 2024. although it fell slightly by 1.21% month-on-month, it increased by 12.3% year-on-year.
judging from the number of properties for sale in each city, among the 14 key cities in august, the number of properties for sale in four cities increased month-on-month, among which nanjing, chengdu and shanghai ranked the top three in terms of the increase in the number of properties for sale, at 2.7%, 1.8% and 1.2% respectively.
from the perspective of the sales cycle, the second-hand housing sales cycle in key cities in august 2024 was 20.1 months, a month-on-month decrease of 11%, but a year-on-year increase of 8.5%. the sales cycle is still higher than the level before august 2023.
since the beginning of this year, there have been multiple rounds of supporting policies on the property market, and second-hand housing transactions in some key cities have also been boosted. however, judging from the market inventory, the overall listing volume has not declined significantly, and there is still a large amount of existing housing to be digested.
for example, in hangzhou, a large number of second-hand houses have been listed at a "low-price" price, meaning that the listing price is lower than the purchase price of new houses. according to the data from the hangzhou shell research institute, the average transaction price of second-hand houses in hangzhou in august was 27,628 yuan per square meter, a month-on-month decrease of 5.5% and a year-on-year decrease of 7.4%. the number of newly listed second-hand houses increased by 5% month-on-month.
another example is beijing, where the impact of the new policy gradually weakened, the local second-hand housing market returned to a stable range in august. according to maitian real estate statistics, the total number of second-hand housing listings in beijing in august increased slightly by 0.3% compared with july, and the second-hand housing inventory stopped falling and rebounded.
"the current volume of second-hand homes listed for sale continues to be high. some sellers may choose to list their properties out of concerns about future market expectations or pressure from personal financial needs, hoping to sell them through the market as soon as possible to avoid the risks brought about by future uncertainties." guan rongxue, senior analyst at linping residential big data research institute, told caixin.
on the other hand, due to the relatively relaxed current housing purchase environment, the catalysis of favorable policies such as "old for new" and "recognizing housing but not loans" plus lower down payments on first-home purchases, residents' willingness to "sell old and buy new" has increased, and the number of listings has risen accordingly.
according to cric statistics, in the 11 core cities including beijing, shanghai, guangzhou and shenzhen, the main motivations for owners to list their houses for sale include selling for replacement, cashing out, hedging against falling house prices, investment to stop losses, inability to repay loans, and cashing out to repay debts.
among them, more than half of the owners will still buy new ones after selling their old houses. in 11 cities, the proportion of replacement customers reached 52%. replacement is still the main motivation for second-hand house owners to sell their houses. cashing out, hedging against falling house prices, and investment stop loss ranked second, third, and fourth for the motivation of selling houses, accounting for 16%, 12%, and 9% respectively. the main purpose is to convert real estate into cash.
a small number of people sold their homes due to financial pressures, such as not being able to pay back loans or cashing out to pay off debts, but the proportion was only 4%, indicating that the debt pressure on the resident side and the overall risk of defaulting on mortgages were controllable. the remaining 3% sold their existing homes for reasons such as divorce property division, changing residence, and tax planning needs.
regardless of the reason, the high number of second-hand housing listings makes it more difficult for owners of old, dilapidated and small houses to sell their homes.
“if you want to sell your house, you can’t avoid price cuts”
"in the current market, if you want to sell your house, just lower the price. if you don't lower the price, someone else in the same community will."
talking about this year's second-hand housing market, a local real estate agency in hebei said that the overall market is now a buyer's market. once the owner decides to sell the house, if he wants to sell it quickly, he must adjust the price to a lower level in the same community, or even a lower level in the area, so as to attract people to view the house. otherwise, no one will be interested.
the purpose of price reduction is to sell the house quickly, but this makes the second-hand house owners suffer. if they want to speed up the sale, they have to lower the price to the lowest level in the community, which will trigger a series of chain reactions. the owners who do not lower the price will be more passive.
this phenomenon is not an isolated case. a shanghai homeowner said that she officially listed her house at the beginning of the year, and she thought it would be sold in a few months. she also had high hopes for the new house she wanted. unexpectedly, she did not have a viewing for three consecutive months, and the new house she booked was in urgent need of funds. the agent said that if she wanted to sell it quickly, it would be best to lower the price to a competitive price in the community, which was hard for her to accept.
“if i don’t sell, i will face financial pressure, but i will be reluctant to sell it, let alone sell it at a low price.” this is the voice of many property owners at present.
from the overall market trend, the current trend of second-hand housing prices being reduced has not been significantly reversed. according to the china real estate index system 100-city price index, in august 2024, the average price of second-hand housing in 100 cities was 14,549 yuan per square meter, down 0.71% from the previous month, and has fallen for 28 consecutive months, with a year-on-year decline of 6.89%.
xu yuejin, deputy director of research at china index academy, told caixin that at present, the second-hand housing market as a whole continues the trend of "trading price for volume". some owners have a demand for replacement and improvement, and take advantage of the market low to improve their homes; in addition, some owners expect that housing prices will continue to decline, and choose to sell their houses to optimize asset allocation.
in terms of the number of cities with rising and falling housing prices, in august, the number of cities with a month-on-month decline in second-hand housing prices in the top 100 cities was 100, marking the fifth consecutive month of a collective decline in second-hand housing prices in the top 100 cities, even in first-tier cities. in august, second-hand housing prices in first-tier cities fell by 0.72% month-on-month.
since the beginning of this year, the second-hand housing market in beijing has rebounded. in addition to favorable policy stimulus, a very important factor is that prices have dropped to the right level. according to anjuke beijing, in july 2024, the average transaction price of second-hand houses in beijing was 54,000 yuan per square meter. the price has returned to august-september 2016, and has fallen by about 25% from the peak of the housing price.
the above-mentioned agency said that even chaoyang district, the hottest area for second-hand housing, was not immune, and the high-priced "old, dilapidated and small" houses are accelerating their decline. in a popular community, a one-bedroom apartment was sold for 6.78 million yuan in march last year, and the same apartment was sold for 5.19 million yuan in july this year, a drop of 25%. another high-end hot property had a two-bedroom and one-living room apartment sold for 7.63 million yuan last year, and the same apartment was sold for 5.35 million yuan on a low floor in july this year, a drop of 2.28 million yuan, a drop of 30%.
shenzhen, once a hot spot for the real estate market, has also seen a certain decline in housing prices. the shenzhen-central real estate association said that the seemingly "steady recovery" of the second-hand housing market this year is largely due to the concessions made by owners on prices, in addition to the support of favorable policies. "price for volume" has become the fundamental reason for the relatively "high" monthly second-hand housing market.
the shenzhen-zhongshan real estate association also stated that since august, the intensity and strength of market competition have been significantly stronger than in the first half of the year, and the extent of price "concessions" by owners has tended to further intensify. the current seemingly "stable" basic foundation of the second-hand housing market is still not solid.
waiting for further policy release
with listing volumes remaining high and second-hand housing prices falling in hundreds of cities, the current property market is in urgent need of a "booster".
since the beginning of this year, several rounds of policies have been introduced on the real estate market side, covering multiple dimensions such as commercial loan interest rates, down payment ratios, provident fund loan interest rates, etc., aimed at stabilizing demand, destocking, and stabilizing expectations, and the second-hand housing market has also been boosted to a certain extent.
minsheng securities said that in the first half of the year, the transaction area of both new and second-hand houses decreased year-on-year, and the second-hand housing market performed better than the new housing market. among them, the second-hand housing market fell by 8% year-on-year, and the new housing market fell by 38% year-on-year. the year-on-year decline in second-hand housing was relatively small.
however, it is a consensus in the industry that the policy effect has weakened since august. new home sales have cooled down after a brief recovery, and second-hand home sales have also fallen due to seasonal factors.
according to monitoring data from the linping residential big data research institute, 104,433 second-hand residential units were sold in the 14 key cities in august, a decrease of 13.2% month-on-month and an increase of 19.27% year-on-year; from january to august, a total of 809,818 units were sold in the 14 key cities, a slight decrease of 0.6% from the same period last year.
"after the new policy on may 17 this year, the transaction volume of second-hand houses has increased significantly, especially in key cities, where the monthly transaction volume exceeded 120,000 units in june and july. in august, the policy effect diminished and the monthly transaction volume in key cities reached 100,000 units." the agency said that in terms of cities, the transaction volume in the 14 key cities monitored in august all fell month-on-month.
taking shenzhen as an example, the latest data from shenzhen centaline research center shows that in august, 2,537 first-hand residential properties were signed online in shenzhen, down 3.0% from the previous month; 3,804 second-hand residential properties were transferred, down 16.8% from the previous month, and the number of second-hand residential property transactions was the lowest in the past six months. in addition to the weakening of policy effects, august is traditionally a low season for transactions, which also affected the transaction level.
in the industry's view, the current direction of the real estate market still relies on the support of favorable factors. "september is the window period for the introduction of policies in previous years, and major new policies have been introduced many times over the years. if the new policies are not strong and the introduction time is delayed, it is expected that transactions will continue to decline in september." linping residential big data research institute said.
xu yuejin said that the policies that can be expected next may include: first, interest rate cuts. since 2022, my country's lpr for terms of more than five years has been reduced by 80bp cumulatively. the pace of interest rate cuts is relatively slow, and there is still room for interest rate cuts in the future; second, the optimization of state-owned enterprises' storage policies. as of the end of august, about 30 cities have issued notices on the collection and storage of housing by state-owned enterprises. at present, the implementation of the policy will still face certain adjustments, and the policy details need to be optimized; third, the purchase restriction policies in core cities such as beijing and shanghai are expected to be relaxed.
guan rongxue believes that in terms of expectations for subsequent policies, on the one hand, there have been recent news that the interest rates on existing mortgage loans will be lowered and mortgage loan conversions will be allowed, which will have a certain positive effect on stimulating consumption and reducing the mortgage pressure of existing customers, and will help boost market confidence; on the other hand, since current housing demand and market confidence require a certain amount of time to recover, subsequent policies must not only stimulate demand, but also focus on improving residents' employment and income.
it is worth noting that expectations for the market and policies have restored the confidence of some second-hand home owners.
according to the monitoring data of linping residential big data research institute, among the houses with price adjustment in the 14 key cities in august, the proportion of houses with price increase was 7.3%, an increase of 0.13 percentage points from the previous month and a decrease of 0.99 percentage points from the previous year. "the confidence of owners in the 14 key cities to increase prices has increased, but the confidence of owners in the 50 key cities is still declining. the confidence of owners in high-level cities to increase prices is higher than that in third- and fourth-tier cities."
(this article comes from china business network)
