How should home buyers grasp the trend from the 70-city housing price index
Property market observation
For cities where housing prices are rising too fast and are in the top 10 of the country’s 70 cities, there are often places where housing policies are tightened.
The 70-city housing price index released by the National Bureau of Statistics shows that housing prices rebounded in August, with prices rising slightly.
The 70 City Housing Price Index is similar to the Shanghai Stock Exchange Index in the stock market. It largely measures housing price trends and market cycles. It is a barometer of whether the real estate market is hot or cold, and it is also an important reference for the formulation of housing market policies.
According to simple arithmetic calculations, in August this year, the price index of newly built commercial housing in 70 cities across the country rose by 0.6% month-on-month, which is an increase from the 0.5% figure in July.
How should we understand this rebound?
First, market transactions are an important factor in determining housing prices.
In fact, residential transactions in August this year were not bad.
The property market across the country has generally shown a V-shaped trend. Due to the previous backlog of housing demand, it was entering a stage of active release. Therefore, August transactions actually increased slightly compared to July.
Active trading also tends to make prices slightly firmer.
Second, although some cities introduced tightening policies in August, they were actually only a minority.
For most cities across the country, the policy is still mainly loose.
For example, in the issuance of pre-sale permits, localities are generally relaxed, which allows many projects to be sold at high prices, which is also likely to cause housing prices to rise.
At the same time, we must also see that different cities perform differently.
The data shows that in August this year, housing prices in first, second and third-tier cities rose by 0.6%, 0.5% and 0.6% month-on-month.
In horizontal comparison, second-tier cities saw the smallest increase.
Looking at the vertical comparison, that is, comparing the July data, it can be seen that the first and third lines are showing an upward trend, while the second line is flat.
This is more in line with the current policy environment, that is, second-tier cities are the most densely tightened cities in the near future, and the housing price rise is easily suppressed.
The first-tier cities and third-tier cities have relatively loose policies, so prices tend to rise.
After gaining a clearer understanding of the housing price trend in August, buyers including home buyers will be more concerned about the subsequent trend.
It should be noted that the house price index is a statistical concept, which eliminates many interfering factors.
For market participants, they may also pay attention to the subsequent average transaction price. After all, this is more intuitive.
Simply looking at the average price, the possibility of ups and downs of different properties exists.
However, in terms of market conditions this year, real estate companies are still facing the pressure of destocking. When it comes to the traditional gold nine silver ten, there will be price reduction promotions and profit sharing practices.
Of course, the price cut at this time is compared to the level of the first half of this year or July-August. If it is compared to last year, it will not necessarily fall, especially for some projects with higher land prices.
Having a clearer understanding of housing price trends will help buyers to better plan their home ownership strategies.
But for the 70 city housing price index, its meaning is by no means so simple.
From the perspective of policy trends in the past two years, various policies will refer to the trend of housing prices in 70 cities.
For cities where housing prices are rising too fast and among the top 10 cities, there are often places where housing policies are tightened.
Judging from the data released by the Bureau of Statistics this time, Huizhou, Yinchuan, Jinzhou, Tangshan, Wenzhou, Jining, Shenyang, Xi’an, Wuxi and Jinhua have seen relatively large gains. In addition to the policies that have been introduced in Shenyang and Wuxi, the policies of several other cities have The tight probability is increasing, and buyers should have such awareness.
To sum up, simply looking at the market fundamentals this year, house prices are indeed likely to rise, which makes it difficult to see house prices fall too quickly in the off-season.
However, for some cities where housing prices have risen excessively, from the perspective of housing not speculating, there will still be control and suppression, which in turn will make relevant price data possible to cool down.
Buyers should grasp the cycle and trend from the national price index of 70 cities.
□Yan Yuejin (financial commentator)