Recently, Zhao Wei, chief economist of Kaiyuan Securities, released a research report saying that since 2021, the tone of "implementing policies in the city" has been mainly tightened, and the policy relaxation of cities is still a minority.
Which cities are fine-tuning their policies? Areas where land income has declined significantly
The research report pointed out that since 2021, the real estate policies of some second- and third-tier cities have been fine-tuned by "city policies", relaxing housing purchase qualifications and increasing housing subsidies. Since 2021, the cities with relaxed regulatory policies have mainly concentrated in the northeast region, the second-tier cities in Shandong, and the third-tier cities in the central and western regions. From the perspective of fine-tuning policies, the relaxation measures mainly include increasing the amount of provident fund loans, relaxing the restrictions on settlement and housing purchase qualifications, giving housing subsidies to eligible talents, limiting the decline in house prices, and increasing housing subsidies. Since July, the number of cities with loosened policies has grown.
Since 2021, most of the cities where the real estate regulation and control policy has been fine-tuned "according to the city's policies" have seen a sharp decline in land income. Among them, qingdao, Hohhot, Harbin, Changchun, Shenyang and other land auction rates rose sharply; under the rise of land auction rates, land transfer income fell sharply; in the first half of the year, Qingdao, Hohhot, Shaoguan, etc., land transfer income, two-year compound growth rate of -27.2%, -12.4%, -14.6%, respectively.
How can policy fine-tuning boost real estate? or relatively limited
The research report pointed out that since 2021, the tone of "implementing policies according to the city" has been mainly tightened, and the policy relaxation of cities is still a minority. Since 2021, the overall regulatory tone of "because of the city's policies" has been tightened, and nearly 70% of the urban regulation and control policies tend to be tightened, and the proportion of regulation and control tightening is 34 percentage points higher than that in 2020; among them, the proportion of tightening regulation and control policies in first-tier and second-tier cities has reached 96% and 64% respectively. In particular, hot cities such as Shanghai, Shenzhen, Hangzhou, etc., have strengthened measures such as restricting purchases, strictly investigating consumer loan funds for purchasing houses, and establishing price guidance for second-hand houses.
From the perspective of the effect of the relaxation policy, among the cities that relaxed regulation earlier, the growth rate of commercial housing sales area in Qingdao, Shenyang, Hohhot, Shaoguan, Yueyang and other cities continued to decline. Among the cities that have been fine-tuned by the policy in the early stage, Shenyang and Hohhot respectively relaxed the restrictions on the amount of provident fund loans and the conditions for settlement in January, but from the perspective of real estate sales, the effect of regulation and relaxation was limited; in the first eight months, the sales area of commercial housing in Shenyang and Hohhot had a two-year compound growth rate of -10.7% and -5.6%, respectively, down 5.8 and 20.3 percentage points from the growth rate in 2020.
How to interpret real estate investment under the "city policy"? Or continue to the downside
According to the research report, under the shortage of funds and the recovery of the inventory destocking cycle, housing enterprises have reduced land acquisition and slowed down the pace of construction, dragging down real estate investment. Under the increase of regulation and control policies, among the sources of real estate funds, the two-year compound growth rate of domestic loans has been negative for three consecutive months; at the same time as financing is tightening, mortgage supply is restricted, and under the tightening of "city policy" regulation, real estate sales have continued to decline since the middle of the year; financing has tightened and sales have fallen, resulting in a continuous rise in the financial pressure of housing enterprises. In addition, the inventory destocking cycle of commercial housing, the year-on-year growth rate changed from -23% in the middle of the year to 30.6% in September, further dragging down investment.
The research report also pointed out that the current housing enterprise capital and inventory destocking environment is similar to that of 2011 and 2018, and it is expected that there will still be great downward pressure on real estate investment in the future. Reviewing the history, in 2011 and 2018, there was also a shortage of funds and a recovery in inventory. Under the increase of regulation, in 2011 and 2018, real estate sales showed a significant decline, and the financing of housing enterprises tightened, dragging down real estate investment for 14 and 8 months respectively. Since the middle of 2021, the growth rate of real estate sales and investment has been down for 5 months, and the current round of real estate regulation and control has exceeded that of 2011 and 2018, and there is still downward pressure on future real estate investment. (Zhongxin Jingwei APP)
!["Full start next week!" Zhao Wei left Kaiyuan Securities and became the chief economist of Guojin Securities[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)