Key takeaways:
The superposition of "flood + epidemic" has caused the market to temporarily shut down. Credit regulation has tightened, further hitting market sentiment. Just need the group to support the property market, the value of the main urban area is prominent. In the future, the market will gradually recover in 3 months, the fundamentals of the property market will be good, and the main city and the suburbs will continue to diverge.
★ Directory ★
First, the recent trend of new housing transaction volume and price
1.1 The trading volume showed a cliff-like decline, and the overall trend of the transaction price was stable
1.2 The main city and the suburbs are differentiated, and the willingness of buyers to return to the main city is obvious
Second, the internal reasons for the change in the volume price
2.1 Reason 1: The superposition of "flood + epidemic" has caused a short-term market shutdown
2.2 Reason 2: Credit regulation has been tightened, and the ability of home buyers to pay has been hit
2.3 Reason 3: Just need groups to support the market, and the value of the main urban area is prominent
Third, the three major predictions for the future
3.1 Prediction 1: In the short term, the market will gradually recover in the next 3 months
3.2 Prediction 2: In the long run, the fundamentals of the property market are good
3.3 Prediction 3: Between regions, the main city and the suburbs continue to diverge
Part 1 Recent new home transaction price trends
▶ Trend 1:
From the perspective of transaction volume, the transaction area of commercial housing (new houses) in Zhengzhou from January to April 2021 continued to rise sharply, reaching a small peak in April, but then it fell by about 10% month-on-month in May-June, 29% in July, and 82% in the first half of August.
From the perspective of transaction prices, from July 2020 to July 2021, the average transaction price of commercial housing (new houses) in Zhengzhou has basically maintained a stable trend, and the average transaction price in the first half of August 2021 has decreased by 1.7% compared with July 2021 and increased by 3.4% compared with July 2020.
▶ Trend 2:
The transaction volume of the main city and the suburbs is differentiated, and the sales area of the main urban area accounts for 64% of the total sales area of Zhengzhou in July 2021, accounting for a rising proportion, and this phenomenon is not caused by supply-side reasons, because the inventory of the suburbs in the past two years has been far beyond the main city, which shows that more and more buyers tend to choose the main urban area to buy a house.
The transaction price of the main city and the suburbs is differentiated, and the average sales price of the main urban area in July 2021 is 15406 yuan / ㎡, up 3.6% year-on-year, and the average sales price of the far suburbs is 8024 yuan / ㎡, down 5.7% year-on-year, and the price differentiation between the suburbs and the main city is obvious.
Part 2 The internal cause of volume price changes
▶ Reason 1:
On July 20, 2021, affected by the flood in Zhengzhou, the market was suspended for about a week, and the transaction volume and price of commercial housing (new houses) fell together. At the time when the market was just about to recover, the epidemic in Zhengzhou spread in early August, the offline sales department was almost completely shut down, and the market began to enter a state of shutdown, and the transaction volume was as low as the freezing point.
▶ Reason 2:
In 2021, the local policy end of Zhengzhou will focus on controlling land prices, stabilizing house prices, and improving quality, mainly from the capital end, soil auction rules, and building standards. The demand for funds is the most stringent, the loan is difficult, the loan is slow, the cost of loans is getting higher and higher, and the demand-side funds are restricted to become an important factor in the continuous decline in market turnover.
After May, due to the "double limit" policy of bank real estate loans and the strong demand for housing purchases in March and April, the amount of loans available to banks in real estate was soon insufficient, and subsequently, the loan interest rate rose by 25%, the lending time was extended, and second-hand houses were generally suspended. The increase in the difficulty of loans and the increase in the cost of loans have greatly hit the ability of home buyers to pay, and it is expected that difficult loans and slow lending will become the norm in the second half of the year.
On July 16, the Zhengzhou Housing Provident Fund Management Center issued the "Notice on Adjusting the Housing Provident Fund Use Policy", after the adjustment, the housing provident fund payment period was extended, the standard for determining the repayment ability was improved, the personal credit inquiry was newly carried out, and the period of withdrawal of the provident fund after the purchase of the house was shortened. The increase in the difficulty of housing provident fund loans has further reduced the ability to pay funds on the demand side.
▶ Reason three:
From January 2019 to July 2021, the Zhengzhou property market has almost always been oversupply, and house prices are tepid, and can even be understood as being in a long-term state of decline. Under this kind of market, the real estate bubble is constantly being squeezed out, speculators leave Zhengzhou, and the property market is supported by real just-needed groups. The industrial advantages of the main urban area have gathered a large number of foreign workers, and the value is prominent, and more and more buyers tend to choose the main urban area to buy houses.
Part 3 Three predictions for the future
▶ Prejudgment 1:
It is expected that the market will not improve throughout August 2021, the volume and price will fall together, the volume and price will rise steadily in September and October, the volume is expected to return to the small peak state in April, and the transaction price will be basically at the same level as in August. There are two reasons for this:
(1) The situation of epidemic prevention and control is grim, and it is expected that the epidemic will be controlled by the end of August: On August 10, 2021, the Henan Provincial Party Committee held the fifth special meeting on the prevention and control of the new crown pneumonia epidemic, mobilized the whole province to anchor the goal, continued to implement various measures for epidemic prevention and control in a strict and meticulous manner, and ensured that the epidemic situation was sealed and extinguished by the end of August. Therefore, it is expected that the epidemic will be controlled at the end of August, during the epidemic period, housing enterprises mainly rely on online channels for sales, from the sales situation in the first half of August, the recognition of online house selection is low, and the market will continue to be in a short-term shutdown state in August.
(2) The backlog of housing demand will be released, and the trend of housing enterprises exchanging price for volume is obvious: the market has been shut down for a month due to the double blow of "flood + epidemic". The sales of supply-side housing enterprises have been blocked, the pressure on liquidity has increased, and discounts, promotions, and special-priced houses have appeared frequently. If the factors affected by the epidemic are eliminated in early September, housing enterprises are bound to increase the opening volume and tend to adopt a marketing strategy of exchanging price for volume, and the market will be dominated by volume in September and October, and the backlog of housing demand after "flood + epidemic" will also usher in the release.
▶ Prediction 2:
The current fundamentals of the Zhengzhou market are relatively healthy, and it is expected that 2021 will be an important period for the market to return to health. There are three reasons for this:
(1) Policy support for the rise of the central region, good urban development, and population support on the demand side
In terms of policy support, on July 22, 2021, the CPC Central Committee and the State Council issued the Opinions on Promoting High-quality Development in the Central Region in the New Era (hereinafter referred to as the Opinions), which named Zhengzhou nine times in the Opinions, and Zhengzhou's urban development enjoyed full support from national policies.
In terms of urban development, Zhengzhou's GDP has reached a new high in the past 10 years, and its ranking has been rising, and in 2020, Zhengzhou's GDP will exceed 1.2 trillion yuan, ranking 16th in the country.
In terms of population demand support, according to the data of Zhengzhou Qipu, the permanent population in the city reached 12.6 million in 2020, an increase of nearly 4 million over 2010, with an average annual increase of 400,000. According to the official calculations of Zhengzhou, by 2035, the population of Zhengzhou will reach 18 million people, there is still a gap of 5.4 million people, and there will be an average of 350,000 people flowing into Zhengzhou every year in the future, which will provide strong support for the future demand for urban housing.
(2) Zhengzhou house prices are at a low level in the same level of cities, and the price support is strong
Judging from the average sales price of commercial housing (new houses) in the top 35 cities in terms of GDP in July 2021, Zhengzhou is at a low level among the same level of cities. Zhengzhou house prices after four years of gloomy market washing in 2017-2020, the basic left is just need customer group, the current price support is strong.
(3) The supply of land has been greatly reduced, and the market has opened a healthy state of supply and marketing balance
From the perspective of the transaction volume price of residential land, the floor price of residential land transactions remained stable in 2016-2020, and the reason for the sharp increase in 2021 was mainly due to the transformation of the land supply area from the far suburbs to the main urban area. From 2016 to 2021, the transaction volume of residential land has changed greatly, and the impact on the market is also the deepest. From 2017 to 2019, the supply of residential land reached 140 million square meters, and the sales area of commercial residential buildings in 2018-2020 was only about 8300 square meters, and the amount of land supply completely exceeded the scope of the market. In 2020, the construction area of residential land supply decreased by 30% year-on-year to 31 million square meters, and from January to July 2021, it was only 14 million square meters, and the amount of land supply returned to a healthy state. However, it will take about 1-2 years to reflect the subsequent sales market, so 2021 will be a window period for the market to return to health.
Affected by the excessive supply of land in the early stage, the market supply exceeded demand in 2020, and the inventory volume continued to rise. However, after the late adjustment of the supply side and the digestion of the demand side, the market is basically in a state of supply and demand balance from February to July 2021.
▶ Prediction 3:
As of August 15, 2021, the supply of residential land in 2021 is 13.91 million square meters, with the far suburbs accounting for only 23.8%, the main urban area accounting for 76.2% and most of the two concentrated plots provided on June 3. Due to the large amount of land supply in the main urban area and the small quality of the land supply in the far suburbs, it is foreseeable that a large number of high-quality projects located in the main urban area will be sold centrally at the end of the year, and the transaction volume and price of the main city and the suburbs will continue to diverge.