“The era of house prices only rising without falling is over.”
On December 1, the Housing Big Data Project team of The Institute of Financial And Economic Strategy, Chinese Academy of Social Sciences released the “China Housing Big Data Analysis Report (2020) — Urban Housing Price Warning and Housing Enterprise Brand Value Measurement” (hereinafter referred to as the report). The report pointed out that the local housing price fall monitoring early warning, will become an important aspect of market monitoring early warning. Although the stable operation is an important goal of the real estate policy, a certain range of fluctuation is also the normal operation of the market.
New home prices in Langfang are down 46.9% from their peak
In 2020, the overall real estate market showed a downward trend. In the cities monitored by the report, some cities saw a certain decline in housing prices in 2020. According to the year-on-year monitoring of weft House Index, from October 2019 to October 2020, the annual decline of 9 cities is more than 5%, and the highest annual decline is 9%.
According to data from Shell Research Institute, from January to November in 2020, the number of new houses sold in 66 cities decreased by 5.2% year on year, and the volume of new houses sold declined by 5.4% year on year, but the decline narrowed by 1.1-1.5 percentage points compared with that in October.
The downward trend in some cities is even more pronounced when compared with historical peaks.
Record high, according to a report from the cities to in October, 2020, 20 cities from the high house price adjustment are over 10%, among them 9 city from the high house price adjustment are over 15%, fall is the largest city in the langfang, compared with a drop of about 46.9% from its peak in April 2017, Qingdao, tianjin than peak fell more than 20%.
In terms of the time point when the housing price in various cities turns from rising to falling, there are two kinds of situations at the periodic inflection point of housing price in these cities. One is around the first half year of 2017, represented by the Cities of Beijing, Tianjin and Hebei. It is mainly caused by the increase of real estate regulation in first and second-tier cities in the first half year of 2017, which has been adjusted for about three and a half years so far. The other is around the second half of 2018, mainly in third-tier and fourth-tier cities, mainly caused by the ebb tide of the monetized shantytowns, which has been adjusted for about two and a half years.
As you can see, in many cities, housing prices peaked before the outbreak began. The fall in house prices is not entirely due to the impact of the epidemic.
The report indicates that local housing price fall monitoring and warning will become an important aspect of market monitoring and warning. Although the stable operation is an important goal of the real estate policy, a certain range of fluctuation is also the normal operation of the market. The reasons for falling house prices are complex, which may be due to macro-environment factors as well as oversupply of the city itself.
Housing prices in some cities are still rising fast
Under the policy background of urban policy, the differentiation of urban real estate market will become normal. The emergence of COVID-19 has accelerated the advent of the era of great divergence in the real estate market.
While prices in many cities fell, the report said “there are still some cities with relatively rapid price increases”.
According to a report by Shell Research Institute, by November 2020, the transaction volume of new housing market in first-tier cities has basically recovered and reached the same state as that of the same period last year, with a year-on-year growth of 0.3% in the number of transactions and 1.3% in the area of transactions.
Among them, Shenzhen “7·15” New Deal, and “7·29” New Deal added, the overall regulation is strict, but the new house in the process of restraining the house price rising too fast, stimulate just need the main customer into the market, the market heat is high. At the same time, due to the stimulus of talent policy in Guangzhou, the accumulative year-on-year growth rate of new house transaction area continues to rise.
‘The reasons for rising prices are equally complex,’ the report said. ‘They may be due to macro factors, inadequate supply of the city itself, or significant positive economic fundamentals.’ In addition, it is difficult to identify the relatively fast rising situation directly. For example, the housing price in the related similar cities declines rapidly, but the housing price in that city rises slightly.
In this context, real estate has also become an important aspect of preventing financial risks in China.
Guo Shuqing, party secretary of the People’s Bank of China and chairman of the China Banking Regulatory Commission, said recently that real estate-related loans account for 39 percent of banking loans in China, and a large number of bonds, equity, trusts and other funds have entered the real estate sector. It can be said that real estate is the biggest “gray rhino” in terms of financial risk in China at the present stage.
article links：Real estate bid farewell to the era of only rising
Reprint indicated source：Spark Global Limited information