At the beginning of the new year, can the Chengdu property market have a "virtuous circle"? Be one of our biggest concerns. Since the fourth quarter of last year, the marginal improvement of the real estate credit environment has played a role in alleviating the demand for reasonable housing to a certain extent, but the foundation of the market's own repair is not solid, and the reshaping of market participants' confidence still needs a long time, which also needs to be accurately protected by the policy. We judge that the transaction activity of the second-hand market in Chengdu will gradually recover after the holiday, and the trading trend may converge in the same period from 2018 to 2019, lower than the same period in 2021. The second-hand market after the holiday may show the characteristics of just need to be first, suburban release and rejuvenation.
First, the pre-holiday performance of the second-hand market may be related to the rhythm of returning home during the Spring Festival
In late January 2022, affected by the Spring Festival return, the supply and demand of Chengdu's second-hand housing market showed a certain degree of decline. Monthly trading volume was lower than the same period in 2020 and 2021.
Figure 1: The transaction volume of the second-hand housing market in Chengdu in the first quarter of 2019-2022
Source: Shell Research Institute Chengdu Branch
In order to eliminate the impact of different years of natural month Spring Festival holiday time is not the same, we restore the trading cycle with the lunar calendar, take the trading volume of the fourth week before the Spring Festival in the past 4 years as the base period, observe the change of the average weekly trading volume before the Spring Festival, we found that: with the approaching of the Spring Festival, the second-hand trading in most years showed a trend of accelerating and decreasing weekly, and the performance of the 2-3 weeks before the Spring Festival in 2022 tended to be the same as that in 2018-2019, and the trading volume in the last week before the Spring Festival was only equivalent to 40% of the base period, at a low point of nearly 5 years.
Table 1: Transaction trend of the second-hand housing market before the Chengdu festival in 2018-2022
Combined with Baidu migration data analysis, the pace of the people moving out of Chengdu before the holiday this year was significantly earlier than in previous years, and the migration index was significantly higher than in previous years, or it became the inducement that the transaction volume in the last week before the Spring Festival this year decreased faster than in previous years.
Figure 2: Migration trend of Chengdu from 2019 to 2022
Source: Baidu Migration
Second, the three characteristics of the post-holiday secondary market trend
1. Just need to go first
Every year after the Spring Festival in February and March, the demand for second-hand rigid housing will usher in a certain scale of concentrated release, mainly reflected in a set of two small apartments and a low total price of the proportion of transactions increased rapidly. After April, the second-hand housing transaction chain will gradually be transmitted to improved housing with larger rooms and higher total prices.
Figure 3: From January 2019 to January 2022, the proportion of second-hand housing transactions in Chengdu
Figure 4: The proportion of the total transaction price of second-hand houses in Chengdu from January 2019 to January 2022
2. Suburban discharge
The suburbs that attract more and more foreigners to buy property have all shown themselves after the Spring Festival in 2019-2021: the proportion of second-hand housing transactions in the city has increased rapidly, while the proportion of the main city in the city has declined. This may be related to the preferences of built-in business groups in different cycles, customers who buy in the main city have a higher preference for related packages, and customers who buy in the suburbs tend to be more sensitive to price. (Main cities: Jinjiang, Chenghua, Jinniu, Wuhou, Qingyang.) Suburbs: Longquanyi, Wenjiang, Shuangliu, Pidu, Xindu,)
Figure 5: From January 2019 to January 2022, the proportion of transactions in the main city and suburbs of Chengdu's second-hand housing
3. Young people
In the first quarter of each year, the main sources of growth in Chengdu's second-hand housing market are young people aged 20-30 and middle-aged people aged 30-40. Since the outbreak of the epidemic in 2020, the demand growth of young people aged 20-30 has accelerated significantly, and the customer group exceeding 30-40 years old has become the main second-hand customer group after the holiday. In 2022, this trend is likely to continue.
Figure 6: Analysis of the source of post-holiday customer growth in 2019-2021
Third, the post-holiday market trend prediction
In order to enhance the prediction of the future market, we restore the average daily trend of lunar trading volume, and we can clearly observe that the average daily trading volume performance of second-hand this year is slightly better than the same period in 2018-2019 and weaker than the same period in 2020-2021. Judging from this, after a number of policy superimposed adjustments in 2021, the natural repair of the secondary market still needs a long time. On the one hand, since the fourth quarter of 2021, the marginal improvement of the real estate credit environment has eased, the reasonable demand for housing has been eased, and the downward trend of the market has gradually pressed the pause button. On the other hand, affected by the continuous downturn in the macroeconomic environment in the fourth quarter of last year, rigid real estate has become more rational, the trading cycle of merchants has continued to lengthen, and the market trading volume is still at a low level in the past year. Therefore, we maintain a cautious optimism about the performance of the second-hand market after the holiday, "optimistic" that the small YangChun after the holiday will not be absent, and also "cautious" in the post-holiday trading trend is more likely to converge in 2018-2019, and it is unlikely that the same period of 2021 will appear.
Figure 7: Daily second-hand trading volume trend of the Spring Festival in 2018-2022
The degree of recovery of the post-holiday secondary market is related to the speed of the virtuous circle. On the one hand, the orderly release of second-hand replacement demand is conducive to the repair of the chain of selling the old and buying the new, which may have an impact on the de-industrialization cycle of the new housing market. On the other hand, if the backlog of demand for just-needed housing is suppressed, it may lead to the growth of demand in the rental market, and the degree of supply and demand structure may eventually affect the market-oriented housing rental price.
Chengdu overlooking