Recently, several subtle trends of real estate regulation policy have once again triggered speculation about the direction of real estate regulation.
On December 12, the National Development and Reform Commission issued the Notice on Supporting High-quality Enterprises to Finance Directly to Further Enhance the Entitys Economic Ability of Enterprise Bonds Service (hereinafter referred to as the Notice) to support large real estate enterprises to issue corporate bonds. Because of the frequent approval of corporate bonds of some enterprises before, this has triggered speculation about the loosening of real estate financing policy. But the NDRC urgently dispelled rumors.
The next day, Xi Jinping, General Secretary of the CPC Central Committee, chaired a meeting of the Political Bureau of the CPC Central Committee to analyze and study the economic work in 2019. There is no mention of real estate, which is the first time in the last four years.
In recent years, the frequency of local governments regulation policies has slowed down. Liaoning also encourages areas with sufficient housing resources and large stock. The monetization of shantytowns can be continued. Given the pressures on the current economic growth, some analysts believe that there may be loosening of the housing market regulation policy.
What trends do these complex policy signals reflect? Will the longest regulatory policy in history that lasted for more than two years be adjusted?
Changing policy trends
In recent years, the intensity and frequency of real estate regulatory policies seem to have been somewhat loosened.
Central Plains Real Estate Research Center pointed out that from November to December as a whole, the real estate policy is basically stable. Compared with previous frequent tightening, the biggest feature of real estate policy is the sharp reduction of restrictive policies. Since December, in addition to expanding the scope of purchase restrictions in Chengde, other urban policies have been basically stable.
On December 11, Liaoning Provincial Housing and Urban-Rural Construction Department has officially issued the Work Program for Promoting Real Estate De-Inventory in County Towns and New Urban Areas, proposing to promote the transformation of shanty towns, old residential areas and dangerous houses in County towns. In areas with abundant housing resources and large stock, monetized resettlement can be continued in shantytown renovation to digest inventory of commodity housing. The introduction of such stimulus policies has also attracted wide attention in the market.
In terms of domestic financing, since November, Poly, Longhu, Sunshine City, Huaxia Happiness and other housing enterprises have issued intensive financing actions, involving votes, trusts, corporate bonds, etc., totaling more than 100 billion yuan.
However, for some time before, the financing market was still locked in the door. Housing enterprises, including Biguiyuan, Fuli, Hengda and Financial Street, had encountered the embarrassment of the suspension of corporate bonds.
The emergence of these signs makes the market reverie about the direction of regulatory policies. After the issuance of the Notice by the Development and Reform Commission, the expectation of deregulation has been raised again. Sichuan Finance Securities pointed out that the new regulation allows the use of raised funds to supplement working capital from the previous 40% to 50%, the financing side of Housing enterprises is gradually improving. The agency also said that in November, mortgage rates in Guangzhou, Hangzhou, Wuhan, Nanjing and other cities improved, and the pace of lending accelerated. The scale and cost of housing financing are also declining. Therefore, the policy environment is expected to gradually improve.
On December 13, the NDRC urgently dispelled rumors that in accordance with the spirit of the central government on the construction of a long-term mechanism for real estate, at present, NDRC corporate bonds only support projects in limited areas such as shanty reform, affordable housing, rental housing, and not commercial real estate projects. Over the past few years, there has been no change in the implementation of corporate bonds in the implementation of the national real estate regulation and control policy.
On the evening of December 13, Xi Jinping, General Secretary of the Central Committee of the Communist Party of China, chaired a meeting of the Political Bureau of the Central Committee to analyse and study the economic work of 2019. There is no mention of real estate. In July this year, when the Political Bureau meeting deployed the second half of the economic work, it expressed that the real estate market was determined to solve the real estate market problems, adhere to City-based policies, promote the balance of supply and demand, guide expectations reasonably, rectify market order, and resolutely curb the rise of house prices.
In fact, at the end of the past three years, all the meetings of the Political Bureau of the Central Committee mentioned real estate, involving housing system reform and long-term mechanism construction. This year seems to be off the beaten track.
Does this change mean that there will be some adjustment in the real estate regulation policy next year?
The general tone will not change.
According to the view of policy loosening, when economic growth is good, regulators will tighten the real estate regulation policy; otherwise, when economic growth declines, regulators will loosen the regulation to support economic growth. Over the past few years, there has been a good market for this view.
Recently, economic growth has been facing some difficulties, and the argument of deregulation has risen again.
Most analysts believe that the meeting does not mention real estate, does not mean that real estate regulation policy will change. Yan Yuejin, director of research at the think tank center of Yiju Research Institute, told the 21st century economic report that the main idea of the current real estate market is still to stabilize housing prices. After a period of regulation and control, the real estate market has tended to cool down. Therefore, the Politburo does not mention real estate, in order to maintain the status quo. Zhang Dawei, chief analyst of Central Plains Real Estate, shares the same view.
In fact, from the recent statements of government departments and government media, there is no change in the caliber of regulation and control of the real estate market. On October 29, this year, in response to the future trend of house prices, Xinhua News Agency published a signed article saying that the central governments determination to curb the rise of house prices will not change and will never allow the past to be abandoned.
On the same day, the Ministry of Housing and Construction issued a bulletin on the inspection and improvement of the exhibition, saying that General Secretary Xi Jinping should firmly implement the principle of sticking to the orientation that houses are used for living, not for speculation. It should intensify classified regulation and precise implementation of policies to speed up the construction of housing system.
On December 13, the Economic Reference Daily published an article entitled Deeply ImplementingHousing without Stir-fryingto Avoid the Great Rise and Fall of the Housing Market. It said that the current housing market is expected to loosen, not only because of the citys policy, but also because of the rapid release of market demand momentum. In the special period of superimposition of external shocks and internal transformation, the further implementation of housing without speculation should maintain the steady and healthy development of Chinas real estate market, and spare no effort to avoid the ups and downs of the real estate market, which urgently needs the strong support of the real estate market rationality.
Analysts believe that, compared with the meeting of the Political Bureau of the Central Committee held at the end of previous years, this years meeting for the first time appeared six stable (stable employment, stable finance, stable foreign trade, stable foreign investment, stable investment, stable expectations). It can be seen from this that stabilizing the economy is the key task of next years economy. As an important aspect of economic growth, the general tone of real estate regulation will not change fundamentally.
But will there be regional and structural loosening in this policy?
Guosheng Securities, when interpreting the meeting of the Political Bureau of the Central Committee, said that real estate is still a strictly regulated cycle. Houses are used for living, not for speculation, and resolutely curb the rise of house prices or the main tone. But the agency also pointed out that stable growth can not be separated from real estate (property market regulation policy) next year will probably be structural relaxation.
According to 21st century economic reports, after 30 months of the longest regulation in history, many city governments are trying to loosen the regulation, such as lowering the threshold of price limit. But from the market performance, the actual effect is not good. A person from a real estate enterprise in Xian told the 21st century economic report that this is because the market demand has been released in large quantities, coupled with high prices, increased supply scale and other factors, the demand sides enthusiasm has declined.
The source pointed out that in the first half of this year, the supply of new housing projects in Xian was mostly between 1:5 and 1:6, and it was very common that the opening sale was exhausted. But now that proportion has dropped to about 1:1, its good to degrade more than 50% on the opening day. He also believes that unless there is a significant reduction in house prices, it will be difficult to stimulate market demand.
Most respondents pointed out to the 21st century economic report that the market has entered the downward channel, unless the real estate regulatory policy is loosened substantially, it is difficult to fundamentally boost the market. Yan Yuejin believes that at present, the initiative of real estate policy is in the hands of the local government, and even if it intends to adjust, it will not go beyond the scope stipulated by the regulatory authorities. Therefore, regional and structural adjustment may occur, but it will not bring real benefits to economic growth.
Statistics from the Bureau of Statistics show that in November this year, the area of real estate sales across the country decreased by 5% from the same period last year, with a consecutive three-month decline. Central Plains Real Estate pointed out that the real estate market has turned a corner. If the policy remains unchanged, there will be a significant adjustment in the market next year.