“This year, 10 million units of affordable housing for the first time exceeded the size of commodity housing “, “real estate loans remain cautious,” “anti-price control land supply ‘king'” “local price control objectives announced” …… Recently, the property market regulation policy from authorities signal lead to social attention.
Analysts believe that with a multi-pronged administration, finance, taxation, protection of housing and other aspects of the measures, Chinese property market especially the one-tier property market may occur a “turning point.”
First-tier cities, loose signal transfer
“Rate out 1 million a day! You may be able to buy rooms at prizes 20-50% lower than market price, it all depends on whether you aim at the right object!” On March 14 in Nanjing, a real estate company launched the “purchase unreserved” activities, come up with a set of availability on a quarterly basis for users online to purchase.
Recently, Nanjing Song Du Mieyu also launched the “discount back taxes” campaign. Each unit can be 10 million cheaper after discounts.
“After the new ‘the State Council Eight Guidelines’ policy introduced was less than two months, the property market has been offering dizzying promotion.” Nanjing East Kai Properties general manager Bao Tianlei, said last year’s fourth quarter to date, trading volumes of tier-one cities gradually decline, some developers “follow the market ” enhance the promotions. Reporters learned that, with respect to the gimmicky promotions, some brands have begun to cut prices substantially.
In Beijing, Sino-Ocean Land “Ocean Side” (遠洋一方) new real estate sales price per square meter was nearly 4,000 yuan cheaper than the average price of the previous batch; in Shanghai, China Oversea’s “Scenic Views and Sunny shore” (御景熙岸), its actual price is 24% off its pre-Internet reference price. In Guangzhou, on February a real estate property’s price was 5,000 yuan straight down.
National Bureau of Statistics data released on the 11th showed that from January to February, the national real estate sales area was 81,430,000 square meters, up 13.8% over last year, but the growth rate down 24.4 percentage points.
China Real Estate Information Group’s data showed that first week of March Shanghai’s commercial housing turnover fell 16%, prices fell below 20,000 yuan mark, which is nearly the lowest in 32-week, close to the lowest of level of last year, after the New Deal “4.17” was released. Nanjing this year, average daily turnover was less than 100 units, dropped five percent, entering an era of “downturn.”
High-end residential market is almost “frozen.” According to Centaline statistics, On February Shanghai high-end second-hand housing transactions accounted for just 3% of turnover; and affordable housing has increased to 48% of the total turnover, other city second-hand housing market turnover also showed similar characteristics.
General manager of 365 Wang Shang Real Estate Hu Guanghui said, on the Nanjing market, transactions of small units of affordable housing accounted growing; large volume small apartment, villa, luxury investors almost accounted zero; and for pre-scheduled luxurious buildings , check out amount increased monthly.
“The falling price phenomena of Beijing, Shanghai, Guangzhou and other places is just the beginning.” Pei Zhong, general manager of China Area, Southeast Asia Real Estate said, “as long as the policy continued, prices should fall.”
Sharp force policy, the property market is expected to “turn”?
From April 2010, “the State Council Ten Guidelines” ” the State Council Five Guidelines “, ” the State Council Eight Guidelines “, “purchase restriction order”, “property tax pilot” “limit price” “prevent diwang”(防地王) “affordable housing” and other policies are rolled out in aggressive postures; and there were more space for policy implementation than previous regulation.
Deputy Minister of Housing and Construction, Qi Ji said that last year sales of commodity housing units in China was about 900 million. This year it will be the first time in China in terms of housing supply that supplies of affordable housing were more than commodity housing. 10 million units of affordable housing construction is sufficient to drive the development of the industry and dozens of real estate-related industries. Economic stability will not be affected, which makes room and time for market regulation.
Land control is unprecedented. It will avoid the phenomenon of “flour is more expensive than bread”. Land and Resources Department issued a notice on March 10, “resolutely put an end to the phenomenon where floor price premium is over record price of similar kind of land “.
“Now the anti ‘land king’ is a red line, who touched who is accountable.” An urban construction officials of Yangtze River Delta, said that this year, the city’s most land auction deserted, and only two or three developers participated, there were reserve price transactions more than once.
“Rates are likely to start loosening from luxurious buildings and hot area, because now no one wants to buy.” A Nanjing business executive Zhang Ming calculated to reporters, a big house at least cost two to three million. People who buy a big house are mostly buying their second set of house. 60% of the down payment will be 100 million in cash.
In addition, the “prudent lending” policy draw developers’ funding chain. Lands supply tilt to affordable housing and small sizes commodity housing, which will reduce the increase of premium……
“This round of regulation of real estate can be said to find the crux of the problem and the direction of governance,” Hu Guanghui thought that the multi-pronged approach not only against the foam, increasing supply, and more important to change the phenomena of housing prices “only up not down” .
Implementation of control measures, needs force from multi-party
China International Economic and Exchange Center Wang Jun has said, on the one hand policies of limiting housing prices and land prices is expected to end “the era of profiteering “ of real estate industry; on the other hand, the stable, low-profit model of affordable housing is being formed. In the future, brand developers entering into the field of affordable housing is a trend. Small developers will gradually exit the industry. “Commodity Housing + Affordable Housing” two-track model has shaped, which enhance state’s control on the real estate industry.
“Recently, the property market appears the saying of ‘turning point’ again, but the phenomenon of a large number of market supply does not appear, indicating that the developer either cover properties, or wait and see, or sell at a lower price, or use a small amount of housing to test the market, the game has just begun.” China Real Estate Research Center Yin Xiaobo said, “construction of affordable housing make people see hope, but we cannot say that people feel secured in the bottom of their heart.”
Nanjing citizen Mr. Shen said that since there are constructions of so many public rental housing, there should be announcement as soon as possible in respect of what the admission requirements is, and let people who have meet the conditions began to line up now and do the lottery. This can stabilize expectations. Even when they did not win the lottery, they can also make choices as soon as possible. What people are most worried about is that “after waiting for a few years, but did not get affordable housing, regulation ends up nothing, house prices and rents go up, but he ended up ‘a sieve’.”
Analysis of the industry said, real estate industry should get out of the cycle of “prices still go up after repeated regulation”. There should be a full understanding of the difficulty of regulation. What people are concerned are threefold: first, premature withdrawal of policy. Only when control policies continue, it could completely dispel speculators’ idea. Second, the effectiveness of the regulation has been cut. Some local land finance “tighten”, the government may come up with a variety of ways “to lift up the market.” Third, policy control “blind spot.” The focus of this round of regulation in on the first-tier cities, hot cities where the policy effect is fermented, but in some second and third tier cities, housing prices are still rising fast and becoming new hot spot for speculative and investment capital. Market regulation has to prevent the “press the gourd dipper up.”
Related News