◎ Text / Yang Kewei Yu Qianqian
In August, the launch of real estate companies was stable and slightly declined, and it is expected that the new supply will drop by another 7% month-on-month, and the absolute volume will be the same as the monthly average in the first quarter. According to CRIC research, 27 key cities are expected to add 6.72 million square meters of new commercial residential supply area in August, down 7% month-on-month and 35% year-on-year, and the absolute volume is significantly lower than the monthly average in the second quarter, flat at 6.74 million square meters per month in the first quarter, and only the first-tier cities are increasing month-on-month.
From the structural point of view, it is mainly based on rigid demand and improvement, supplemented by high-end; The proportion of the main city, suburbs and suburbs is 57%, 29% and 14% respectively. The average opening rate predicted from the accumulation of project visits and subscriptions was about 26%, down 3pcts and 9pcts month-on-month respectively. We believe that there is a high probability that the transaction volume in August will continue to fluctuate at a low level.
Scale: The supply of 27 cities fell by another 7%, flat in Q1 2024, and only the first-line contrarian ring increased by about 3%.
In August, the enthusiasm of real estate companies to launch the market was stable and declined, although the absolute volume was not as average as the monthly average in the second quarter, it was basically the same as the monthly average in the first quarter. According to CRIC research, 27 key cities are expected to add 6.72 million square meters of new commercial residential supply area in July, down 7% month-on-month and 35% year-on-year, and the absolute volume is significantly lower than the monthly average in the second quarter, and basically the same as the monthly average of 6.74 million square meters in the first quarter.
In terms of energy levels, only the first-line maintained a positive month-on-month increase, and the cumulative year-on-year decline was significantly lower than that of the second and third lines. Among them, Beijing is expected to concentrate on the volume, and the supply is expected to reach 490,000 square meters in August, the absolute volume is the second highest in the year, and it is expected that more than 4,600 houses will enter the market, and the cumulative year-on-year is basically the same as the same period last year. Shanghai, Guangzhou, Shenzhen have maintained a month-on-month increase, year-on-year downward trend, taking Guangzhou as an example, August is still the traditional off-season, but the end of the month is close to the Golden Nine node, it is expected that real estate companies will speed up the pace of evidence collection from the second half of the year, the supply has increased to the level of about 520,000, pure new plates, Longjiang Shunkong Longyue Bay into the market faster, the main flat, is expected to drive the release of high-end customer demand.
The supply of the second and third lines was stable and declined, with a month-on-month decline of 17%, and the differentiation continued to intensify. In absolute terms, the monthly supply of Tianjin and Changsha exceeded 500,000 square meters. From the perspective of changes, it can be roughly divided into the following three categories: (1) Changsha, Fuzhou, Xuzhou, Zhangzhou, etc., which have increased by more than 5% month-on-month this month due to the low base of last month. (2) In the early stage, the supply of hot cities such as Xi'an, Chengdu and Hangzhou was pulled back in stages this month, falling month-on-month. (3) The supply of most cities is still sluggish, maintaining a year-on-year decline, Tianjin, Nanjing and other declines are small, Wuhan, Zhengzhou, Changchun, Wuxi and other second- and third-tier cities have a relatively large decline, and Quanzhou has maintained 0 supply this month.
Structure: The supply has just been reformed, supplemented by high-end, and the proportion of improved supply in major cities such as Shanghai, Hangzhou and Rong has increased significantly
From the perspective of the distribution of each product grade in the supply structure, the proportion structure of rigid demand, improvement and high-end in key cities is 41%, 45% and 14%, showing a supply structure dominated by improvement and rigid demand, supplemented by high-end.
In terms of cities, (1) Changchun, Shenzhen, Chongqing, Beijing, Xuzhou, Ningbo, Zhengzhou, Nanjing, Kunming, Wuhan, Xi'an and other cities account for more than 50% of the supply of rigid demand products. (2) Xiamen, Zhangzhou, Qingdao, Hangzhou, Shanghai, and Nanning still take improvement as the main force of supply, accounting for more than 7 percent. (3) The proportion of high-end products in Fuzhou, Hefei and Wuxi increased significantly, reaching 60%, 42% and 40%.
From the perspective of the regional distribution of each project in the supply structure, the proportion structure of the main city, the suburbs and the far suburbs of key cities is 57%, 29% and 14%, and the supply focus is still concentrated in the main urban area this month, followed by the suburbs and the least in the far suburbs.
In terms of cities, (1) Xiamen, Zhangzhou, Kunming, Fuzhou, Hefei, Nanning, Chongqing, Zhengzhou, Wuhan, Shanghai, Xi'an, Hangzhou and other major cities accounted for more than 7 percent. (2) Beijing, Changsha, Ningbo, Changzhou and Tianjin are mainly suburban projects, accounting for more than 5%. (3) The supply structure of Nanjing, Qingdao and other cities takes into account the main city and the suburbs. (4) The supply of Guangzhou's main city, suburbs and suburbs is basically three-thirds of the world, accounting for more than 3 percent. (5) A small number of cities such as Changchun, Shenzhen and other suburbs will continue to increase supply, which is expected to cause inventory backlog.
Prediction: The main city is mainly improving, but the average de-escalation rate is low, and the transaction will still be low, but Beijing, Shanghai, Chengdu and Hangzhou are expected to stabilize
After taking stock of the supply in August, combined with the transaction characteristics of various cities, we can make a simple prediction of the market outlook: the supply in August fell year-on-year, and the push is still dominated by the main urban area just changed, and the overall transaction is likely to continue to fluctuate at a low level.
Based on the areas where different cities launched in August and the historical de-escalation of each regional sector since 2024, we can see that the expected de-escalation rate in August 2024 is 26%, down 3 percentage points from the previous quarter and 9 percentage points from the same period last year, which is basically the same as the market heat in the second quarter of 2024. The differentiation of different cities is expected to continue, which can be roughly divided into the following types of typical cities:
In the first category, the de-urbanization rate of core first- and second-tier cities such as Beijing, Shanghai, Chengdu, and Hangzhou is more than 3%. Beijing, Shanghai, Hangzhou and other new policies on the market to boost the effect of decreasing, July visits, subscriptions have fallen to varying degrees, but thanks to a slight increase in supply and structural improvement, the overall de-conversion rate increased month-on-month, year-on-year is not as good as the same period last year. Although the current de-conversion rate in Chengdu is still at a high level, it has fallen year-on-year, which is significantly lower than the average value in the first quarter, and the growth momentum is slightly insufficient.
The second category is Ningbo, Zhengzhou, Nanjing, Suzhou, Wuxi, etc., or due to the supply volume or continuous optimization of the supply structure, the market is expected to recover at a low level, increasing month-on-month, better than the monthly average in the second quarter. Among them, Zhengzhou and Wuxi increased month-on-month, with a significant increase, mainly due to the supply of quality and contraction, taking Wuxi as an example, only 3 plates of supply in August, and the main urban area to improve the high-end, which objectively increased the market heat. Ningbo is mainly due to the phased increase in supply, which increased year-on-year, and the overall transaction heat is expected to rebound at a low level.
The third category is rigid demand-oriented cities, such as Kunming, Qingdao, Chongqing, etc., or due to the mismatch between supply and demand, or due to the impact of low-cost diversion of second-hand housing, the de-conversion rate may continue to fall year-on-year. Qingdao strengthened the proportion of improved product supply this month, but due to the location problem, there was no significant improvement in the removal rate, while Chongqing and Kunming were still dominated by the supply of rigid demand projects in the main urban areas this month, but second-hand houses were favored by rigid demand customers due to their low total price and wide choice, and continued to divert rigid demand customers, which also made the expected removal rate of the two cities in August less than 15%. In fact, for this kind of market, unless real estate companies can strengthen their marketing efforts and attract customers at low prices, it is difficult for the overall transaction to perform well.
Overall, the supply in August fell steadily, mainly in the main urban area of rigid demand, improvement, the supply structure continued to optimize, the short-term first-tier and some second-tier market heat still has signs of stabilization, the vast majority of weak second- and third-tier cities, the de-conversion rate is more and more significant by the supply structure, the degree of profit concession of real estate enterprises, etc., the improvement of the plate is significantly better than the rigid demand, and the differentiation between projects will continue to intensify.