On the one hand, there will be a resurgence of the peoples robbery war around the country and the intensive issuance of policies to attract talents; on the other hand, there will be more than 70 Chinese cities relaxing the restrictions on settlements this year. As the core supporting factor of real estate development, will the large inflow of people cause the fluctuation of the Chinese real estate market which has been cooling down and stabilizing again?
Talent Policy Opens the Gate Again
Since 2019, many hot cities, such as Nanjing, Dalian, Xian and Guangzhou, have upgraded or promulgated talent policies to attract talents by increasing policy efforts in terms of talentssettlement, purchase subsidies, living allowances and supporting security. For example, in early April, Hangzhou issued a new household registration policy, full-time university professionals and above, who work in Hangzhou and pay social security, can settle down directly.
According to the statistics of the Central Plains Real Estate Research Center, there are more than 50 cities that have issued various policies on talent introduction in China in 2019, of which at least 9 cities have introduced new policies on settlements, both in terms of policy strength and in terms of the number of cities. Especially in second-and third-tier cities, incentive policies such as talent settlement and purchase subsidies have blowout, and many cities have directly introduced zero threshold settlement policies.
This is not the first time. Two years ago, the last wave of peoples war was initiated by the second-tier cities, then gradually spread to the first-tier and third-tier cities, and even attracted many county-level cities to join. As a result, the population of many second-and third-tier cities has increased rapidly, and the real estate market has also been warming up. Taking Xian as an example, according to the statistics of the institutions, from the implementation of the new household registration policy to the end of 2018, Xian has added more than 1.55 million new settlers. In 2018, the price of new housing in Xian rose 22.4% year-on-year, the largest increase in the country.
After the policy of spontaneous launching in many places has lowered the threshold, the national level has also made unified arrangements for the household registration system. The National Development and Reform Commission recently issued the Key Tasks for the Construction of New Urbanization in 2019, which proposed that the reform of the household registration system should continue to be strengthened, and that the residence restrictions should be abolished or relaxed in cities with different population scales. For example, the type II metropolis with a permanent population of 1 million to 3 million in urban areas should abolish the restriction on settlements in an all-round way, and the type I metropolis with a permanent population of 3 million to 5 million should liberalize the conditions for settlements in an all-round way.
According to Ni Yichen, chief real estate analyst at China-Thailand Securities, 78 cities will relax their residence restrictions this year, covering almost all first-tier and second-tier cities and some strong third-tier cities, according to the number of urban population previously disclosed by the government. It can be imagined that the big cities with strong population absorption ability will usher in a wave of people flow.
Data map: real estate market. China News Agency reporter Zhang Changshou
Local Xiaoyangchun or Extension
Ni Yichen believes that considering that the policy of restricting purchase is often conditioned by the restriction of household registration, this also means that the first, second and third-tier cities that relax the restriction of residence also relax the conditions of restricting purchase. The number of people who satisfy the qualifications of buying houses in large and medium-sized cities is increasing, which promotes the potential demand for buying houses.
Xu Xiaole, chief market analyst of Shell Research Institute, believes that the rising housing prices caused by the settlement policy are expected to stimulate demand to release in the short term. This may mean that the Xiaoyangchun property market in some cities since March will be prolonged.
Since the second half of last year, Chinas property market has entered a cooling channel, and the growth rate of house prices has been narrowing. In the first month of 2019, after more than three and a half years, the second-hand house prices in the first and second-tier cities of China changed from rising to falling for the first time, and the market rationality returned. With the stabilization of real estate regulation policy, some first-and second-tier real estate markets have seen Xiaoyangchun since March, and the volume and price have both rebounded. For example, according to agency statistics, the area of new housing transactions in Beijing in the first quarter has more than doubled year-on-year, and the property market around Beijing has also shown signs of recovery.
However, this does not mean that there will be a new round of soaring property market. Xu Xiaole pointed out that the relaxation of the household registration system is only a measure of urbanization development. It is to break the barriers of urban-rural dual structure and promote high-quality urban development. It is not a relaxation of regulatory policies.
Moreover, the settlement policy does not necessarily lead to a rise in house prices. Xu Xiaole pointed out that it also needs to be combined with the insufficient supply of local property market and abundant credit to play a role. Under the current regulatory environment, housing loan supervision is more stringent, and inventory in some cities is gradually rising. Population entry into cities does not necessarily result in tight supply and demand. The experience of the past round of talent policy also shows that the enthusiasm for buying houses stimulated by the settlement policy is often unsustainable. For example, after the talent introduction policies in Tianjin and Xian, the market still declines with the stringent regulatory environment.
With the expectation of Xiaoyangchun warming up, Shenzhen, Hefei and other cities recently issued tightening the regulation and control policies of the property market. Zhang Dawei, Chief Real Estate Analyst of Central Plains, pointed out that stabilizing land prices, stabilizing house prices and stabilizing expectations are the main keynote of real estate policy in the second half of 2018. Follow-up real estate market regulation policies will continue to stabilize the real estate market and prevent sharp rises and falls.
Source: Author of CNN: Pang Wuji Responsible Editor: Li Hang_BJS4645