(Economic Watch) From "rapid recovery" to "stable recovery", China's property market stabilized in the first quarter
Beijing, April 4 (ZXS) -- In the first quarter, China's real estate market changed from a "rapid recovery" to a "stable recovery" model, and the pace of stabilization and recovery in the real estate market is expected to be more stable.
Data map: aerial photography of Fuzhou riverside real estate. Photo by China News Agency reporter Wang Dongming
China's National Bureau of Statistics released China's economic "first quarterly report" on the 18th. Among them, many indicators of real estate continued the momentum of stabilization and recovery at the beginning of the year. From the sales side, although the sales area of commercial housing in the first quarter was still in a downward channel year-on-year (down 1.8%), the sales area of commercial housing increased (up 1.4%) during the same period, and the sales volume of commercial housing also "turned from negative to positive", increasing by 4.1% year-on-year.
Liu Lijie, a market analyst at the Shell Research Institute, said that this is the first year-on-year increase in the sales area of commercial residential buildings since the beginning of last year. From a historical comparison, the sales scale of new commercial residential buildings in the first quarter of 2023 was second only to the peak level in 2021, and the cumulative year-on-year growth rate of commercial residential sales in the first quarter also expanded to 7.1%. The property market is showing obvious signs of recovery.
Chai Qiang, president of the China Real Estate Appraisers and Real Estate Agents Association, pointed out in an interview with China News Agency that the main indicators of China's real estate market in the first quarter showed positive changes, the market generally showed a trend of stabilization and recovery, and the confidence of buyers and investors has been enhanced. "It can be said that the bottom of the real estate market has passed, and the most difficult stage for real estate development enterprises should also pass."
Chai Qiang believes that there are three main reasons for the recovery of the real estate market in the first quarter: First, the demand for housing that was previously postponed or accumulated due to the impact of the new crown epidemic has been relatively concentrated after the epidemic prevention transition. Second, in recent times, some cities have relaxed their regulatory policies in finance, taxation, purchase restrictions, price restrictions, etc., especially the reduction of personal housing loan interest rates, the reduction of the down payment ratio, etc., and a series of policies and measures to support rigid and improved housing demand have played a role. Third, the work of guaranteeing the delivery of buildings in various places has been carried out in an orderly manner, and some buyers can buy houses with confidence, and market confidence has gradually recovered.
Li Yujia, chief researcher of the Housing Policy Research Center of Guangdong Urban Planning Institute, also said that the sales area of commercial housing in the first quarter showed the first positive growth since the beginning of 2022, mainly due to the superposition of lagging rigid demand, demand for housing replacement, and expected warming, resulting in a very strong release of housing demand in the first quarter.
However, since mid-March, the pace of recovery in many places has slowed down. The change in the growth rate of real estate development investment in the first quarter of the country confirms this phenomenon. Official data show that in the first quarter, the growth rate of real estate development investment nationwide fell by 3.5% year-on-year, and the cumulative decline was 8.1 percentage points larger than that from January to February.
Chen Xiao, a senior analyst at Zhuge Data Research Center, believes that from January to February, the decline in real estate development investment narrowed under the support of the rapid recovery of the market, and the year-on-year decline in development investment in March expanded again, indicating that the confidence of housing enterprises was not sufficiently restored.
From the perspective of transaction volume, Chen Xiao said that the sales area of commercial housing in March fell slightly by 3.2% from the previous month, and the sales of commercial housing decreased slightly by 11.2% from the previous month. The property market shifted to steady growth in March from a rapid recovery in February. After the concentrated release of demand in the first two months, the market repair process slowed down, which also means that the "fast recovery" model in the first two months is difficult to continue, and the subsequent market is still dominated by "stable recovery".
Data from the Middle Index Research Institute also confirms this trend. According to the agency's data, after the market soared at the end of the first quarter, the weekly transaction scale of new commercial housing in the first half of April fell overall, and market activity has declined. In the short term, after the further release of the backlog of demand in the early stage, it is expected that the market sales scale may decline month-on-month. During this period, the differentiation of the real estate market between cities has further intensified. The supply side of some core cities still has some support, and market activity is still expected to continue.
Xu Xiaole, chief market analyst of Shell Research Institute, believes that the natural decline in market trading in April does not mean that the market repair momentum has weakened. He pointed out that the stability of housing prices is the basis for the continuous recovery of market expectations, which can promote the rise of the volume and price cycle and promote the entry of wait-and-see customers into the market. According to housing price data from 4 large and medium-sized cities in China for March, the National Bureau of Statistics recently released house price data showing that the prices of newly built commercial housing and second-hand housing rose month-on-month in 3 and 70 cities respectively, both hitting new highs in many months. In the month, house prices in first, second, and third-tier cities rose month-on-month.
Overall, the pace of real estate recovery is expected to be more stable. Chen Xiao pointed out that recently, various places have successively opened the first batch of centralized land supply this year, and the land auction market in key cities has performed well, and it is expected that the recovery of the growth rate of real estate development investment will be strengthened. (End)