(Mid-Year Economic Observation) Will China's property market "turn off" in the second half of the year under three heavy blows?
China News Service, Beijing, July 13th, title: Will China's property market "turn off" in the second half of the year under three heavy punches?
China News Agency reporter Pang Wuji
By the middle of the year, China's property market began to slow down, and the pace of transactions recovered from the rapid recovery at the beginning of the year to a steady rise.
The real estate market has avoided overheating across the board.
Since the second half of last year, global low interest rates and monetary easing have driven house prices in major countries such as the United States, Germany, and Japan soaring, and the difficulty of China's property market regulation has risen sharply.
In the first half of the year, the positioning of "housing, living and not speculating" remained unchanged, and the determination behind it was stronger.
The reporter combed and found that in the first half of the year, China's property market ushered in at least three policy "heavy punches".
The data picture shows an aerial photograph of a newly built residence on the banks of the Min River in Fuzhou City.
Photo by China News Agency reporter Lu Ming
Note 1: Strong supervision of real estate finance
Studies have shown that excessive financialization is the source of real estate risks. There is a saying in the industry that "ten crises, nine real estate".
Be wary of the financial risks of real estate. In the first half of this year, the real estate financial environment continued to tighten.
On the one hand, business loans and consumer loans that illegally flow into real estate are subject to strict inspections.
In the first quarter, Beijing, Shanghai, Guangzhou, Shenzhen and many other places stated that they will strictly investigate the operating loans that illegally flow into the property market. The four places disclosed a total of about 1 billion yuan in illegal funds.
In June, Xiamen Housing Management Bureau stated that it verified that 2,725 loans totaling 1.793 billion yuan flowed into the property market in violation of regulations.
On the other hand, since the second quarter, mortgage interest rates in some cities have been rising steadily.
In June 2021, the 5-year LPR for mortgage interest rates was 4.65%, which has remained unchanged for 14 consecutive months.
However, interest rates for the first and second homes in key cities continue to rise.
In the same month, the Shell Research Institute monitored the 72 cities’ mainstream first-home mortgage interest rate at 5.52%, and the second set of interest rates at 5.77%, which is not far from the November 2019 high.
The real estate loan concentration management system implemented this year is regarded as an important reason for the rise in mortgage interest rates.
Xu Xiaole, chief market analyst at Shell Research Institute, believes that banks used a large amount of real estate loan quotas in the first quarter. Therefore, bank mortgage quotas were limited in the second quarter. Some banks raised mortgage interest rates and extended lending cycles.
The financing of real estate development enterprises has also been put on a "tightening curse."
According to many media reports, the central bank has recently included the "three red lines" pilot real estate business ticket data into its monitoring scope.
The closely related supply chain financing is also under strict control.
In addition, since the beginning of this year, one of the important sources of financing for real estate companies, the scale of real estate trusts has also continued to drop.
Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, said in June that the problem of excessive inflow of funds into the real estate market has been initially reversed.
With the tightening of the credit environment, the new and second-hand housing markets have shown a high level of correction since April.
Data map: real estate.
Photo by China News Agency reporter Zhang Bin
Note 2: It is strictly forbidden to speculate on school district housing
For a long time, school district houses have been at the top of the “pyramid” of the property market, and housing prices tend to rise but never fall.
At the end of April this year, the Politburo meeting rarely "named" school district houses, and clearly stated that "it is necessary to prevent speculation in housing prices in the name of school district houses, etc.".
Since then, many cities including Guangzhou, Chongqing, Xiamen, Chengdu, Dalian, Xi'an, etc. have taken action to rectify the chaos in the school district.
Some cities have also successively introduced educational reform policies such as "multi-school division", "school quotas", and "teacher rotation", in order to diminish the concept of district housing.
Take Beijing as an example. This year, the three districts, Dongcheng, Xicheng, and Haidian, where Beijing’s educational resources are most concentrated, all implemented a strict "multi-school" policy.
The "equal sign" between "buying a house" and "going to a good school" was taken away.
Well-known school districts in Xicheng District of Beijing, such as Desheng, Yuetan, and Financial Street, have been hit hard, and some owners have begun to lower their listing prices.
The Shanghai Municipal Education Commission also announced a new enrollment plan. More than 50% of the enrollment quota for the city’s experimental and demonstrative high schools was allocated to districts and schools.
The certainty that you can go to a good high school by buying a high-priced school district room is further weakened.
Recently, some school districts in Beijing, Shanghai, Shenzhen and other places showed signs of cooling.
The data picture shows a real estate under construction.
Photo by China News Agency reporter Zhang Bin
The third note: centralized supply of land
"Centralized land supply" is the "new thing" of the property market in 2021.
At the beginning of this year, the Ministry of Natural Resources proposed that key cities should centrally announce and centrally supply residential land.
On June 29, 22 key cities completed the first batch of centralized land supply this year, with a transaction amount exceeding one trillion yuan.
However, the Kerrey Research Center pointed out that, with the exception of a few cities such as Changchun and Qingdao, where the overall enthusiasm is low, the enthusiasm for the first round of centralized land auctions in most cities continues to be high.
This new policy is expected to continue to improve.
The agency believes that after obtaining relevant experience in centralized land auctions, it is expected that the volume of the second and third centralized land transfers will increase compared with the first time, and the pace of land supply may be significantly accelerated, especially under the adjustment of land auction rules. , The land acquisition opportunities of small and medium-sized real estate enterprises will also increase.
It is worth noting that in the first half of the year, in addition to short-term administrative controls such as purchase restrictions, loan restrictions, price restrictions, sales restrictions, and the establishment of second-hand housing reference prices, the construction of basic systems and long-term mechanisms in the property market has accelerated in the medium and long term.
Many researchers from the Kerui Research Center believe that the reform of the long-term real estate mechanism will enter the "deep water zone", and the expected increase in the supply of rental housing and the acceleration of the reform of the real estate tax system.
In this context, Huang Yu, executive vice president of the Zhongzhi Research Institute, said that it is expected that the sales scale of the national real estate market is expected to achieve a new breakthrough this year. The sales area may exceed 1.8 billion square meters, and the sales are expected to reach 19 trillion yuan.
With the continuous increase in policies, the increase in commodity housing prices is expected to narrow, and the annual increase will remain at about 6%.
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