After more than 5 years of implementation, Langfang City, Hebei Province, an important property market around Beijing, officially announced the cancellation of housing purchase restrictions.

At the same time, the restrictions on housing sales in the "three Beisan counties" (Dachang, Xianghe, Gu'an) and surrounding Xiong'an New Area were also lifted.

　　Recently, Langfang City published the "Six Policy Measures for Supporting the Virtuous Cycle and Healthy Development of the Real Estate Industry".

The first of these clearly states that the “restrictive purchase conditions” that are not suitable for the current real estate market situation in terms of household registration, social security and personal tax are abolished.

At the same time, it is also emphasized that

the housing sales restriction period requirement for non-local households has been cancelled for key areas such as the "North Three Counties" and the surrounding counties (cities) of the Huanxiong'an New Area.

　　What does it mean that the "restrictive housing conditions" that once ended the carnival of the Beijing-based property market such as "Northern Three Counties" and made it "winter overnight" have been cancelled?

Will the property market in Yanjiao and other places usher in "spring"?

Data map: Yanjiao Exit Interchange Hub of Tongyan Expressway.

Liu Xiangshe

"Huanjing Property Market" by roller coaster

　　Langfang is the nearest prefecture-level city to the urban area of ​​Beijing, and it is also the first choice for many beijing drifters to buy property around Beijing.

However, being backed by Beijing not only brings a lot of demand and opportunities here, but also brings speculation and bubbles in the property market.

In the past 6 years or so, the property market around Beijing has experienced a "roller coaster" market. A large number of real estate speculators have not only shattered their dreams of getting rich, but have also been deeply trapped.

　　According to Zhang Dawei, chief analyst of Centaline Real Estate, the peak was in 2016.

At that time, with the rise in housing prices in Beijing, a large amount of housing demand spilled over to the area around Beijing.

In less than a year, housing prices in the Beijing area including Langfang have doubled rapidly. The unit price of new houses in Yanjiao exceeds 40,000 yuan per square meter, in Dachang it exceeds 30,000 yuan, and in Gu'an it exceeds 25,000 yuan.

　　However, in 2017, with the opening of the purchase restriction in Langfang, non-local household registration required 3 years of continuous social security or personal tax, the number of buyers from Beijing dropped significantly, and the carnival came to an abrupt end.

While the size of the market transactions has shrunk sharply, house prices have also fallen sharply.

　　As the "Yanjiao" with high prices in the Beijing property market, the current housing price is about 20,000 yuan per square meter, and most projects are priced at over 10,000 yuan per square meter. Compared with 2016, most of them have been cut in half or even "knee cut" .

　　Because of the sharp drop in housing prices, in the past two years, there have been frequent news that Yanjiao homeowners "free" the house:

as long as they continue to repay the mortgage, the house will be transferred directly without money.

　　According to the monitoring data of the Zhuge Housing Data Research Center, in 2016, nearly 50,000 new commercial housing units were sold in the main urban area of ​​Langfang. However, since 2017, the annual transaction has dropped sharply, and has remained at the level of about 10,000 units in recent years.

Since the beginning of this year, affected by the epidemic, the transactions in Gu'an and Xianghe around Beijing have been sluggish. In the first half of the year, the transaction volume in Langfang was only 6,763 units, which was only 40% of the transaction level last year.

Policy Signals Behind the Cancellation of Purchase Restrictions

　　Why did Langfang cancel the purchase restriction at this time?

　　Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, said in an interview with China News Service Guoshi Express that the real estate market in Langfang City, especially the commercial housing in Beisan County, has seen a sharp drop in volume and price in recent years. Up to now, many real estate prices have fallen by 50% or more. From the perspective of domestic key and hot spots, such a large decline is very rare.

From the perspective of stabilizing the real estate market, stabilizing growth, ensuring property handover, and benefiting people's livelihood, there is an urgent need for a bailout policy.

　　In addition, Li Yujia believes that withdrawing from the purchase and sale restriction policy in stages, and appropriately reducing the down payment ratio of the provident fund,

is of positive significance for meeting rigid needs and improving needs, especially the needs of some new residents in nearby Beijing to buy houses.

This exit has positive significance when the current investment demand has completely withdrawn, and the policy of controlling capital and credit is still effective.

　　Wang Xiaoqiang, chief analyst of Zhuge Housing Data Research Center, also believes that in the context of weak local housing demand and the current overall pressure on the real estate market, it is necessary for Langfang to cancel the purchase restriction, which

can alleviate the relatively sluggish local property market.

At present, the goal of real estate market regulation is stable, healthy development and a virtuous circle. It is permissible to cancel the strict policies in the past when the market is relatively sluggish.

　　The meeting of the Political Bureau of the Central Committee held recently clearly stated that city-specific policies should be used to make full use of the policy toolbox to support rigid and improved housing needs, to consolidate the responsibilities of local governments, to ensure the delivery of buildings, and to stabilize people's livelihoods.

　　Experts believe that

other cities may have more actions in the follow-up in terms of implementing city-specific policies and making good use of the policy toolbox.

Data map: A railway overpass on Guangming Road in Langfang City.

Photo by Chen Tong

Will the Beijing property market "fire up" again?

　　Zhang Dawei said that after Langfang relaxes control policies such as purchase restrictions, it will bring some heat, especially after years of adjustment, the housing prices around Beijing are already at a low level, and the water has been squeezed out, and the property market such as Yanjiao is expected to bottom out.

However, the purchase restriction policy cannot completely reverse the decline of the market around Beijing. The core also depends on whether the commuting problems caused by checkpoints can be solved.

　　Li Yujia also believes that the property market around Beijing has experienced the fastest decline in recent years, especially since the housing prices of many projects have been cut in half, and many buyers have been trapped.

This has lowered market sentiment and expectations, and it is difficult for the property market around Beijing to rebound significantly in the short and medium term.

　　Chen Wenjing, market research director of the Index Division of the China Index Research Institute, said that in fact, the cancellation of the purchase restriction policy in Langfang City and Beisan County has been implemented, the down payment ratio has also been implemented 20% for the first set, 30% for the second set, and the minimum mortgage interest rate is 4.25%. Various policies have been relatively relaxed, but the market has not recovered.

　　Investigating the reason, Chen Wenjing analyzed that, on the one hand, the rapid heating of the market around Beijing in the past few years was mainly driven by Beijing’s spillover from self-occupation and investment demand. In recent years, the housing supply in Beijing has gradually increased. Urban commuting has been affected to a certain extent, and Beijing's spillover demand has basically "disappeared".

　　On the other hand, the industrial development in the Beijing area has been less than expected in recent years, the population introduction is limited, and the pace of local rigid demand entering the market has slowed down during the market downturn. Therefore,

even if policies such as purchase restrictions and sales restrictions are lifted, the boosting effect on the trading market may be limited.

　　Li Yujia believes that

whether the Beijing property market can start again in the future depends on two points:

First, whether the Beijing property market can rebound significantly.

After Beijing's property market rebounds, Langfang's property market will generally lag 3-6 months to recover.

The second is whether the Beijing-Hebei region can make greater progress in the equalization of public services, which is not just a real estate issue.

　　Author: Pang Wuji