1,5689 units were sold in January and only 4 units in April, why the popularity of the city's property market has plummeted

Author: Li Xiuzhong

The National Bureau of Statistics released real estate market data on May 5, and since April, with the release of the backlog of housing demand in the early stage, the market heat in some cities has declined, and market expectations have been lowered.

In Nanchong City, Sichuan Province, the transaction volume of new houses in the main urban area in April was less than 4,918 units, only 1 units; In January this year, 5689,<> new houses in Nanchong were transacted.

The hot market plummeted

"The flow of people in the real estate is indeed much less now." A person who has been engaged in real estate sales in Nanchong for many years told First Finance and Economics that in January, many buyers poured into the sales department.

Chen Shizhong, executive editor of Nanfang.com, a real estate agency in Nancheng, also said that before the epidemic, Nanchong had more than 2000,1000 new house transactions every month, which dropped to more than 9,<> last year, but less than <>,<> sets are still very rare, and only appeared in September last year, when Nanchong was experiencing a serious impact of the epidemic and static management was implemented in some areas.

Why did the hot house buying scene in January retreat so quickly?

Zhang Li, marketing director of local real estate company Changxin Group, told First Finance and Economics that the government introduced a house purchase subsidy policy a few years ago, and the policy ended on January 1 this year. Therefore, it encourages wait-and-see customers to enter the market in advance. After the end of the subsidy, the transaction volume fell sharply. There are also three years of the epidemic, and many people's income is unstable, and they have also deepened their wait-and-see about buying a house.

Nanchong City launched a housing purchase subsidy policy in October 2022, and the three districts of the main city implemented "developer discounts of 10%, government subsidies of 3%, and government subsidies of up to 3,3 yuan / set". Four other counties and cities have also introduced subsidy policies, such as Yilong County subsidizing 4 yuan / square meter, two-child families with an additional subsidy of 450 yuan / square meter, and three-child families with an additional subsidy of 100 yuan / square meter.

"For home buyers, the Spring Festival period is a good time to buy a house, because house prices have fallen to the bottom, loan interest rates are falling, and the government has subsidized the purchase of houses, so many buyers rush to buy houses before the end of the policy." This is how the salesperson analyzes the psychology of home buyers.

In order to catch the last subsidized train, buyers poured into the sales center at the end of January, and many properties were crowded to buy houses.

Statistics from Nanfang.com show that since the implementation of Nanchong's "Ten Property Market" on October 2022, 10, the transaction volume of the central urban area has increased month by month, and in 1 months, including parking spaces, a total of 4,15005 sets have been sold in the central urban area of Nanchong, subsidizing hundreds of millions of yuan, and the policy stimulus effect is remarkable. Many properties reported that sales significantly exceeded expectations.

However, Chen Shizhong also said that the reason why the transaction volume in April was less than 4,<> sets was that the demand for housing was digested in advance under the subsidy policy, and after the end of the subsidy, it meant that house prices rose, so the wait-and-see attitude of buyers increased. In addition, due to the market downturn in recent years, Nanchong real estate development properties have decreased significantly, and some pre-sale listings have quickly sold out.

Not only that, the characteristics of the Nanchong property market itself also determine that its market has plummeted from the hot time. Chen Shizhong also said that Nanchong is a large labor export market, the property market is characterized by a large number of returns to the hometown around the Spring Festival to buy property, around the Spring Festival in previous years, January and February are also the peak season for property sales, many migrant workers will choose to buy houses during the Spring Festival.

The aforementioned salesperson said that Nanchong returning to the hometown may account for about 80% of market sales, and every year around the Spring Festival is the peak season for property sales, and from March to July and August is the off-season for sales. The reason for the high transaction volume in January this year is that the return to the hometown to buy a house and the good time to buy a house are good.

In January, 1,5689 sets of new residential buildings in the central urban area of Nanchong were signed online, more than three times the transaction volume of the previous month and the highest number in 3 months. In January, the total transaction value of new residential buildings was about 22.1 billion yuan, with a total transaction area of about 32,64 square meters. This number of units exceeded the volume of 55,13 units in February 2022.

However, after the Spring Festival, the transaction volume of the Nanchong property market plummeted. According to the statistics of Nanfang.com, in February ~ April, 2, 4 and 1689 new houses were transacted in Nanfang. Zhang Li said that before the epidemic, Nanchong sold 1455,918~2000,4000 new houses every month, and from the current data, Nanchong's property market has not fully recovered.

The property market has experienced a roller coaster for 10 years

Nanchong is an economic sub-central city in Sichuan Province, a regional central city in northeast Sichuan, and a city with a large population, which is a typical representative of fourth-tier cities. In the past 10 years, Nanchong's real estate market has experienced several roller coasters and has become a microcosm of the development of China's real estate market.

10 years before the first round of surge in the Nanchong real estate market, especially in 2013, Vanke, Greenland, Country Garden, AVIC, Zhongnan and other real estate giants poured into Nanchong, ushered in unprecedented prosperity in the real estate market, and land and property prices continued to rise.

However, it then suffered a deep adjustment in the real estate market, which brought local financial difficulties. As a last resort, in 2015, in order to meet various local financial expenses, the Nanchong municipal government sold the shares of Jinyu Car City, the only listed company it held, and cashed out more than 2 million yuan.

As the second largest shareholder of Jinyu Auto City at that time, the Nanchong Municipal Bureau of Finance sold more than 2015 million shares through collective bidding in May and June 600. This incident happened just before the stock market crash in 2015, when the Nanchong Finance Bureau successfully cashed out at a high point and inadvertently became a "master of escaping the top", which attracted widespread attention after being exclusively reported by First Finance and Economics.

But the peak turns around. Since then, under the policy of destocking the property market, the Nanchong property market has recovered rapidly. In 2017, the Nanchong real estate market broke out again, and land income skyrocketed. After the 2015 crash, the Nanchong Finance Bureau transferred its remaining stake in Jinyu Checheng to the Nanchong State-owned Asset Investment and Operation Company, which increased its stake twice in 2016 and 2017, more than three years earlier.

Zhang Li said that most of the local finances are land finances, and government revenue mainly depends on the proceeds of land transfer, and local finances will face difficulties when the real estate market is sluggish. Therefore, local governments adopt housing subsidies to stimulate demand, and stabilize the land market through platform companies to stabilize the land market, etc., are all government rescue moves.

According to the Report on the Implementation of Nanchong's 2022 Budget and Draft 2023 Budget (hereinafter referred to as the Report), the Nanchong Municipal Government Fund revenue in 2022 will be 159.3 billion yuan (including 150.8 billion yuan from the transfer of state-owned land use rights), accounting for 76.4% of the budget.

The "Report" also said that it actively responded to the triple pressure of "weakening expectations, declining income, and financial tightening" in the real estate industry, accurately identified changes, responded scientifically, and actively sought changes, issued an upgraded version of the "Ten Housing Rules" on time, implemented subsidies for the purchase of commercial housing and underground parking spaces, and optimized provident fund loan policies; Strengthen departmental linkage, strengthen factor protection, accelerate the construction of supporting facilities, optimize land packaging promotion, and strive to stabilize land prices, house prices, and expectations.

Zhang Li said that with the economic recovery, the real estate market will not continue to deteriorate, and the stock in some places is indeed too large and needs policy stimulus, but in general, the real estate market will not skyrocket or fall quickly. By August and September, after the normalization of the environment in the first half of the year, after the income was relatively stable, consumer confidence rose, and the market would not wait and see.