Since the end of last year, the real estate market in some cities has been warming up. In this regard, many places have issued real estate market regulation policies, from cracking down on speculation, to financial and credit policies, and then to the change of land transfer rules. The regulation is constantly targeted and refined. It is expected that it will play a role in calming the overheated situation of individual cities’ property market, and the property market will remain stable throughout the year.
Housing prices in some cities rose slightly
In January 2021, among the 70 large and medium-sized cities, 53 cities with newly built commercial housing prices rising compared with last month. In terms of second-hand housing, the four first tier cities of Beijing, Shanghai, Guangzhou and Shenzhen showed obvious month on month increase.
With the changes of the market, Hangzhou, Beijing, Shenzhen, Jiangsu, Jiangxi, Shanghai and other places have issued policies to regulate the real estate market for some time. The measures include preventing fake divorces from obtaining the qualification to buy houses, cracking down on illegal freezing of capital, encircling business loans, and raising the interest rate of real estate loans. The main measures are to crack down on and curb speculation in the market.
From the “fourteenth five year plan” proposal, to the central economic work conference at the end of 2020, and then to the repeated statements of relevant competent departments, the signal of unswerving real estate regulation has been released. Liu Hongyu, director of the Real Estate Research Institute of Tsinghua University, believes that the state will adhere to the continuity and stability of the real estate regulation policy, implement the long-term mechanism of real estate regulation, and constantly optimize and improve the policy toolbox in practice.
Local governments have introduced continuous control measures to release the signal that once housing prices rise, control measures will be introduced. At the same time, regulatory policies are constantly patched, and in the future, the pertinence and accuracy of regulation will continue to improve.
Financial and credit control cost round focus
“Real estate is the biggest” grey rhinoceros “in China’s financial risk at this stage.” Yu Xiaofen, vice president of Zhejiang University of technology, said that China’s current degree of financialization is too high, which is reflected in the high proportion of real estate in bank credit, the high debt ratio of real estate enterprises, and the rapid growth of household debt ratio.
Since the second half of last year, the real estate regulation has been characterized by more financial and credit policies.
In August 2020, the Ministry of housing and urban rural development and other departments have formed the fund monitoring and financing management rules for key real estate enterprises. The “three red lines” (the asset liability ratio of real estate enterprises after excluding advance collection shall not be greater than 70%; the net liability ratio of real estate enterprises shall not be greater than 100%; and the “cash short debt ratio” of real estate enterprises shall be less than 1) have become important rules for regulating the financing of real estate enterprises.
By the end of 2020, the central bank and the China Banking and Insurance Regulatory Commission (CIRC) issued the notice on establishing the management system of real estate loan concentration of banking financial institutions, setting the upper limit of the proportion of real estate loan balance and the proportion of individual housing loan balance, aiming to control the financial leverage in the field of real estate within a reasonable range.
Through the adjustment of credit policy, all regions have increased the supervision of house purchase funds. Industry insiders generally expect that the main battlefield of real estate market regulation will be transferred to the field of financial credit, which will have a substantial impact on the real estate market. Strengthening the supervision of house purchase funds will effectively restrain the entry of investors and stabilize the bullish expectation of the market.
Guide rational competition in land market
Recently, Qingdao natural resources and Planning Bureau announced that in order to guide the rational competition in the market, strictly implement the “two centralized” synchronous public transfer of residential land, it will issue the notice of bidding, auction and listing of residential land in three batches throughout the year, and implement the bidding, auction and listing activities.
On February 26, the person in charge of the Department of natural resources development and utilization of the Ministry of natural resources said that this year, all localities are required to further reasonably and moderately concentrate the information on the transfer of residential land, and key cities should make centralized announcement and supply of residential land, so that all kinds of market entities and consumers can fully grasp the information and form reasonable expectations.
Chen Xiao, an analyst of Zhuge housing data research center, said that “organizing a large number of plots to be listed for sale in the same period” will have a certain diversion effect on the funds of real estate enterprises, reducing the number of real estate enterprises bidding for the same plot, indirectly reducing the intensity of land auction, avoiding overheating, and the land premium rate will be effectively and reasonably controlled. At the same time, for real estate enterprises, it will accelerate the differentiation between real estate enterprises. Large real estate enterprises with abundant funds have more strength to participate in the bidding of multiple plots and have more opportunities to acquire land.
The policy analysis article of E-House research institute points out that the policy of centralized land supply helps to reduce land grabbing and promote the stability of land trading market in various regions. In essence, it is also an important embodiment of “stabilizing land price, housing price and expectation”.