Key takeaways:
- In May, residential prices in 70 cities fell to a new high, and the market is still in deep adjustment. In May, the price index of newly built commercial housing in 70 cities across the country fell by 0.7% month-on-month, and the price index of second-hand housing fell by 1.0% month-on-month, and the decline expanded. The price index of newly built commercial housing and second-hand housing in 70 cities fell by 4.3% and 7.5% year-on-year respectively. Both the month-on-month and year-on-year declines in new and second-hand home prices hit record highs. In addition, the number of cities with new home prices falling in 70 cities increased to 68 in May, and the prices of second-hand homes fell in all cities, which fully illustrates the overall market slump.
- In May, the price of second-hand housing in first-tier cities accelerated its decline. Although the "May 17" New Deal tried to stimulate the market, the downward trend of housing prices in first-, second- and third-tier cities has not changed, and the second-hand housing market is facing greater pressure. Among them, the second-hand housing prices in the first-tier cities fell the most month-on-month and year-on-year among the three types of cities, and the decline rate was the fastest, such as Beijing, Shanghai, Guangzhou and Shenzhen, where the second-hand housing prices fell by 8.6%, 7.9%, 11.4% and 9.2% year-on-year respectively.
- Shanghai's new home prices have led the month-on-month increase for three consecutive months, while the prices of new and second-hand houses in Guangzhou have fallen significantly. The only cities with a month-on-month increase in the price index of newly built commercial residential buildings in May were Shanghai and Taiyuan. Shanghai's recent luxury housing boom has not decreased, and the superimposed new policies have boosted the confidence of home buyers to a certain extent. Guangzhou's new home prices fell 1.4% month-on-month and 8.3% year-on-year in May; Second-hand home prices fell by 1.6% month-on-month and 11.4% year-on-year. After a year of continuous decline, the second-hand housing prices in Guangzhou have basically returned to the level of 2018, and it is necessary to pay attention to its market changes and risks.
- In May, the month-on-month index of second-hand residential prices in 70 cities broke through the lowest value in nearly 10 years and may continue to bottom out. Due to the launch of the "5.17" new policy for the property market in the middle and late months, and the implementation of specific policies in various places is close to the end of the month, this has led to the policy effect not having time to appear. Objectively, the housing prices in 70 large and medium-sized cities failed to reach the expected level in May, and still showed a downward trend, and the decline rate failed to be effectively reduced. In addition, the current national real estate market is still showing an obvious trend of "exchanging price for volume", and the industry adjustment continues, indicating that the real estate market in 70 cities is still early to stabilize. All market players should have an objective understanding of the long-term, profound and complex nature of the transformation of the real estate industry and the adjustment of the market cycle. Relevant departments should pay special attention to the second-hand housing market and take the initiative to continue to make efforts in the second-hand housing purchase policy.
One
Housing price index: Residential prices in 70 cities fell to a new high, and the market is still in deep adjustment
1. Month-on-month indicators: the month-on-month decline in the prices of new and second-hand houses hit a new high in nearly 10 years
According to the "Changes in the Sales Price of Residential Buildings in 70 Large and Medium-sized Cities in May 2024" released by the National Bureau of Statistics, the E-House Research Institute conducted a simple arithmetic average of the sales price index of newly built commercial housing and second-hand housing in 70 large and medium-sized cities. In May 2024, the price index of newly built commercial housing in 70 large and medium-sized cities fell by 0.7% month-on-month, an increase of 0.13 percentage points from the previous month, and the price index of second-hand housing fell by 1% month-on-month, expanding by 0.06 percentage points this month after falling for 13 consecutive months. Although the "5.17 New Deal" lowered the down payment threshold and lowered the provident fund interest rate and commercial loan interest rate on the demand side, which lowered the threshold for buying a house to a certain extent, and in the long run, it is conducive to enhancing the willingness of potential home buyers to enter the market, but the housing market has not yet shown signs of stabilization. It can be said that the prices of new and second-hand houses in 70 cities across the country are still in the adjustment period, and the month-on-month index of new and second-hand housing prices has hit the lowest value since December 2014 and September 2014 respectively, which further shows that the downward pressure on the national housing market is unprecedented, and the expectations are still very unstable.
2. Year-on-year indicators: the year-on-year decline in the prices of new and second-hand houses also hit a record high
Based on the simple arithmetic average of the sales price indices of newly built commercial housing and second-hand housing in 70 large and medium-sized cities, it is calculated that in May 2024, the price index of newly built commercial housing and second-hand housing in 70 cities will decline by 4.3% and 7.5% year-on-year respectively, an increase of 0.79 percentage points and 0.7 percentage points respectively compared with the previous month, and the downward pressure on housing prices is still large. At present, the prices of newly built commercial housing in 70 cities have been declining year-on-year for 26 consecutive months, while the year-on-year decline in second-hand housing prices has lasted for 28 months.
At present, the phenomenon of "exchanging price for volume" in the new and second-hand housing markets is relatively prominent, and prices continue to decline overall, hitting a record low. Considering that the month-on-month decline in the prices of new and second-hand houses in 70 cities has lasted for a long time and has fallen significantly, this trend may continue to have a drag effect on the year-on-year indicators of the housing price index in the coming period. Therefore, it is foreseeable that the year-on-year decline in newly built commercial housing and second-hand housing may further expand in the future. This will have an important impact on the stability of the real estate market and the expectations of home buyers.
3. Number of cities: The price of new houses in 68 cities fell, and the prices of second-hand houses in all cities fell
In May 2024, among the 70 large and medium-sized cities, the number of cities with new commercial housing prices rising, flattening and declining was 2, 0 and 68 respectively, and the only cities with new housing prices rising were Shanghai and Taiyuan. Compared with the previous month, the number of rising cities decreased by 4, the number of unchanged cities remained unchanged, and the number of falling cities increased by 4. In terms of second-hand housing, all cities are currently falling, and there are no rising or flat cities. This widespread price decline actually reveals a strong pessimism in the second-hand housing market. The work of second-hand housing needs to be paid attention to, and there is no clear mention of the financial risks of second-hand housing in various places, but in view of the phenomenon of such in-depth adjustment, it is necessary to give early warning of the financial risks related to second-hand housing.
Two
This report performs a simple arithmetic average of the sales price index of newly built commercial housing and the sales price index of second-hand housing in 70 large and medium-sized cities in the first, second and third tiers.
In May 2024, the price index of newly built commercial residential buildings in first-tier cities fell by 0.7% month-on-month, second-tier cities by 0.8%, and third-tier cities by 0.8%. Among them, the month-on-month decline in first-tier cities was the same as that of the previous month, and the month-on-month decline in second- and third-tier cities both expanded by 0.14 percentage points. In terms of second-hand housing, the prices of second-hand houses in the three types of cities fell by 1.3%, 1.0% and 1.0% month-on-month respectively, and the decline rate expanded by 0.15, 0.1 and 0.02 percentage points respectively from the previous month. In terms of year-on-year indicators, the price index of newly built commercial housing in first-, second- and third-tier cities fell by 3.3%, 3.7% and 4.9% respectively in May, with a decline of 0.77, 0.87 and 0.71 percentage points, respectively, while the price index of second-hand housing fell by 9.3%, 7.5% and 7.3% year-on-year respectively, with a decline of 0.73, 0.7 and 0.7 percentage points respectively. Among the first-tier cities, the prices of second-hand houses in Beijing, Shanghai, Guangzhou and Shenzhen fell by 8.6%, 7.9%, 11.4% and 9.2% year-on-year respectively.
Although the "May 17" New Deal tried to stimulate the market, the downward trend of housing prices in the three types of cities has not changed. Compared with the new commercial housing market, the second-hand housing market is under more pressure. Compared with second- and third-tier cities, the downward trend of new home prices in first-tier cities is relatively stable, but the decline is still large. The downward trend of new home prices in second- and third-tier cities is relatively more obvious, and the month-on-month decline has widened. However, the month-on-month and year-on-year declines in second-hand housing prices in first-tier cities are the largest among the three types of cities, and the decline rate is the fastest, so it is necessary to pay attention to their market changes and risks.
Three
City situation: Shanghai's new house prices have led the month-on-month increase for three consecutive months, while Guangzhou's new and second-hand housing prices have fallen significantly
In May 2024, the only cities with a month-on-month increase in the price index of newly built commercial residential buildings were Shanghai and Taiyuan; Cities with relatively small month-on-month declines include Haikou, Xi'an, Changchun, Urumqi, Hefei, Luoyang, etc.; Cities with large month-on-month declines include Guangzhou, Chongqing, Wuhan, Kunming, etc. In terms of second-hand residential price index, the cities with relatively small month-on-month declines include Zunyi, Xuzhou, Guilin, Changchun, etc.; Cities with large month-on-month declines in the second-hand residential price index include Ningbo, Jinan, Guangzhou, Tangshan, Nanchang and Xiamen.
At present, the month-on-month increase in new home prices in Shanghai has been leading for three months. In recent months, Shanghai's high-end and high-quality new residential projects have been in full swing, and its strong market performance may be one of the important factors supporting the stability of the overall real estate price trend. In addition, since the implementation of the "5.17 New Deal", Shanghai, as a leader in the first-tier cities, took the lead in relaxing the relevant regulatory policies, and the adjustment of the new policy has not only increased significantly, but also covered a wider range, which has undoubtedly injected new vitality into the market, boosted the confidence of home buyers, and then promoted the release of housing demand. In addition, the price of new homes in Taiyuan has also maintained an upward trend for three consecutive months, which may be due to the good sales of improved projects in Taiyuan in recent months. There are also factors such as Taiyuan's bail-out policy that was launched earlier, and the policy is strong and sustainable.
It is worth noting that the prices of new and second-hand houses in Guangzhou continued to fall this month, and the decline was relatively large. Specifically, the price of new homes in Guangzhou fell by 1.4% month-on-month this month, continuing the downward trend of 12 months, down 8.3% year-on-year; Second-hand home prices fell by 1.6% month-on-month, which has fallen for 13 consecutive months, and fell by 11.4% year-on-year. After a year of continuous decline, the second-hand housing prices in Guangzhou have basically returned to 2017 and 2018, especially in the peripheral areas of Zengcheng, Conghua, Nansha, Panyu, etc. In central areas such as Lao Huangpu, housing prices have also roughly fallen back to the 2018-2019 level. Other central regions, although not yet down to 2018 levels, have generally fallen by around 20% to 30%. There are three possible reasons: one is that the housing prices in Guangzhou have risen too fast in the past, and the housing prices in some areas have been inflated, resulting in the current price returning to a rational level; Second, in recent years, the downside risks of key industries such as real estate finance and the Internet have been released, which has affected the ability of low- and middle-income new citizens and young people to pay, resulting in an imbalance between supply and demand. Third, with the downturn of the market and the implementation of policies such as education equalization reform, the speculation in the property market such as the planning concept and school district housing in the past has gradually weakened, and the market has returned to rationality.
On May 28, the General Office of the Guangzhou Municipal Government issued the "Notice on Further Promoting the Steady and Healthy Development of the Real Estate Market in Guangzhou", proposing six policy measures, including optimizing land and housing supply, adjusting and optimizing the housing purchase restriction policy, optimizing the housing credit policy, withdrawing provident fund, and optimizing the sales restriction policy. Among them, in terms of the sales restriction policy, it is proposed that the time for obtaining the real estate ownership certificate will no longer be reviewed when resident families, enterprises, public institutions, social organizations and other legal entities transfer or go through the procedures for property separation, and the two-year sales restriction time will be cancelled. It is expected that the prices of new and second-hand houses in Guangzhou may not fall sharply as in May in the coming period, but the number of second-hand housing listings in Guangzhou has increased significantly after the lifting of the sales restriction policy, and the market will still face certain downward pressure in the short term.
Four
Trend prediction: The month-on-month index of second-hand residential prices in 70 cities broke through a record low and may continue to bottom out
Observing historical data, in October 2021, the month-on-month growth curve of the second-hand residential housing price index in 70 cities fell into the "overcooling zone" for the first time since March 2015, and has been generally in a low-level consolidation stage since then. Although the indicator briefly recovered to the "cold zone" and the "reasonable zone" in February-April 2023, the market soon took a sharp turn again, with a low value of -0.8% in November 2023, followed by a slight improvement by March 2024. In May 2024, the second-hand residential price index in 70 cities fell by 1.0% month-on-month, the lowest in nearly 10 years.
In May, which is traditionally regarded as the peak season in the property market, the launch time of the "5.17 New Deal for the Property Market" falls in the middle and late months, and the implementation of specific policies in various places is close to the end of the month, which leads to the fact that the policy effect is too late to appear. Objectively, the housing prices in 70 large and medium-sized cities failed to reach the expected level in May, and still showed a downward trend, and the decline rate failed to be effectively reduced. In particular, the sharp decline in second-hand housing prices in first-tier cities has further highlighted the pressure on the overall real estate market, which does not seem to abate, but rather increases. In addition, as the current national real estate market is still showing an obvious trend of "exchanging price for volume", and the industry adjustment continues, we need to make some risk reminders for the follow-up trend of the second-hand housing price index in 70 cities: first, the real estate market in 70 cities is still too early to stabilize, and the work of stabilizing real estate needs to be further strengthened. Second, in the next six months, the month-on-month increase in the second-hand residential price index in 70 cities may still remain in the "supercooling area", and may continue to bottom out. Considering the transmission mechanism of "second-hand housing-new housing-land market", and the current bearish power of the second-hand housing market in various places is still strong, we believe that the relevant departments should pay attention to the second-hand housing market and take the initiative to continue to make efforts in the second-hand housing purchase policy.