Langfang City officially cancels the purchase and sale restrictions on the first home with a minimum down payment ratio of 20%

Can the Beijing property market recover?

  Our reporter Lu Yang

  In the sixth year after the implementation of the "strictest" purchase restriction policy, the property market around Beijing has ushered in changes.

On August 8, Langfang City, Hebei Province made it clear that restrictive housing purchase conditions such as household registration and social security (personal tax) that are not suitable for the current real estate market situation were cancelled. The requirement for the sale period has released a positive signal of stabilizing the property market.

  From the high point of the property market in 2016 to the low point in 2022, the unit price of new houses in Beisan County has dropped from more than 40,000 yuan to just over 10,000 yuan, and the transaction volume has also dropped again and again.

At this time, can the cancellation of purchase restrictions and sales restrictions effectively promote the recovery of the Beijing property market?

  Beijing's property market eases for the first time

  Since the beginning of this year, under the background of policies to stabilize the property market have been introduced in various places, Langfang has also continued to move.

  In April 2022, it was reported that a local bank in Langfang had lowered the down payment ratio for the first home loan to 20%, but it has not been officially confirmed.

At the beginning of June, there was also news that Langfang City had lifted the purchase restriction.

On June 17 this year, Langfang City officially released the "Six Measures for Supporting the Virtuous Cycle and Healthy Development of the Real Estate Industry", but the most important first one has only one "abbreviation".

  In August, "Gang Liutiao" finally landed its boots, and the "Cancellation of Restrictions on Purchases and Sales" was officially made public.

Among them, it is clear that the cancellation of household registration, social security (personal tax) and other restrictive purchase conditions that are not suitable for the current real estate market situation.

At the same time, for key areas such as Beisan County and surrounding counties (cities) of Xiong'an New Area, the requirements for the number of years of housing sales restrictions for non-local households have been cancelled.

In addition, the other five policies and measures also include further reducing the down payment ratio of housing provident fund loans, and paying employees who use housing provident fund loans to buy a family's first self-occupied house, the down payment ratio shall not be less than 20%; for the introduction of high-end talents, all localities may Combined with the actual situation, subsidies will be given when they purchase their first self-occupied housing, and the maximum loan amount of the housing provident fund will be increased.

  After the cancellation of the purchase and sale restrictions, Langfang City no longer sets restrictions on household registration and social security for home buyers, and the restrictions on the transfer of houses are also cancelled.

"The new policy introduced by Langfang City this time is an adjustment with greater policy relaxation." Yan Yuejin, research director of the Think Tank Center of the E-House Research Institute, said that this move also shows that the current Langfang real estate market is under great pressure, hoping to stimulate and boost it. Buying confidence.

  The downturn in the Langfang property market is reflected in the data.

According to the statistics of the Beijing property market of Keruihuan, the total transaction volume of the 65 projects on sale in Langfang in July was only about 500 units, a decrease of more than 20% from June and a decrease of about 50% from July last year, and the average transaction price was 1.1 million/square meter.

Some home buyers in Yanjiao even expressed that they would like to "deliver the house for free". As long as the home buyer makes up the loan for the second-hand house, they can own the property right of the house.

  "Before there were preferential down payment and loan interest rates, as well as the radiation of Beijing's Pinggu Line, the quiet property market in Beisan County did not splash." A real estate agent told reporters that perhaps after the cancellation of purchase and sale restrictions this time, it can re-inspire some "North Drift" housing demand.

  From a room hard to find to no one cares

  The property market in Beisan County in 2016 was very different from today.

  "In the past few years, Langfang, as a city around Beijing that carries Beijing's overflowing housing demand, has a considerable market transaction volume." Wang Xiaoqiang, chief analyst of Zhuge Housing Search Data Research Center, recalled that Gu'an, Xianghe, and Yanjiao areas were once very popular.

According to 2016 data from the Zhuge Housing Data Research Center, about 50,000 units were sold in Langfang this year, with a total transaction value of about 50 billion yuan.

In less than a year, housing prices in the Beijing area including Langfang have basically doubled. The unit price of new houses in Yanjiao has exceeded 40,000 yuan, that of Dachang has exceeded 30,000 yuan, and that of Gu'an has exceeded 25,000 yuan.

  Due to Beijing's high housing prices and high barriers to entry, buying a house in Yanjiao has become a "just-needed" choice for many "beijing drifters".

At the same time, some real estate speculators also took a fancy to the development potential of Yanjiao and came to invest to make money.

  In 2017, Langfang introduced a purchase restriction policy, requiring non-local household registration to require 3 years of continuous social security or personal tax.

Since then, the number of people buying houses in Beijing has decreased significantly, and the volume and price of the property market around Beijing has fallen.

  Data show that since 2017, the annual transaction volume of the Langfang property market has remained at around 10,000 units.

Since the beginning of this year, due to the impact of the epidemic, the transactions in Gu'an and Xianghe have been even more sluggish. In the first half of the year, the overall transaction volume in Langfang was only 6,763 units, which was only 40% of the transaction level last year.

According to industry insiders, the cancellation of the purchase restriction in Langfang has a certain market necessity and can alleviate the downturn in the local property market.

  Boosting the market requires a livable and workable environment

  "Great news! Langfang has lifted the restrictions on purchases and sales, and you can come to Langfang to buy a house!" On the self-media platform, many real estate agents in Beisan County marked the words "change the sky" and "heavyweight" in prominent positions in the video, "Langfang" How much impact can the "Six Articles" have on the property market around Beijing?

  "Langfang's policy is instructive for other cities around Beijing." Yan Yuejin said that there has been controversy over whether the restrictions on purchases and sales have been lifted in the region around Beijing before, and the relevant loosening policies have not been made public.

The "official announcement" of Langfang City reflects its strong willingness to boost the real estate market transactions.

  Wang Xiaoqiang also said that the cancellation of the purchase restriction in Langfang can alleviate the current market pressure to a certain extent and help the market recover.

However, the current home buyers generally tend to be rational, and the number of real estate speculators has decreased. It is difficult for the Langfang market to return to the market level before the 2017 purchase restriction.

  In fact, in the eyes of professionals, the housing prices in Beisan County were hyped up a few years ago by taking advantage of the sub-center of Beijing.

In the context of housing and not speculating, people's purchasing decisions are becoming more and more rational.

Therefore, the transactions of the property market in the cities around Beijing will not have a great response in the short term.

  Zhao Xiuchi, vice-chairman and secretary-general of the Beijing Real Estate Law Society and a professor at Capital University of Economics and Business, said that the cancellation of purchase restrictions in Beisan County can attract some new Beijingers to a certain extent.

However, in order to truly boost the property market in cities around Beijing, it is fundamentally necessary to allocate high-quality public resources such as education and medical care to create a livable and workable environment to retain the population and talents.