Is the turning point of the real estate market really coming?
On November 15, the National Bureau of statistics released the data of house prices in 70 cities in October. The sales price of newly-built commercial housing and second-hand housing all fell on a month on month basis, while that of first tier cities increased slightly.
In October, among 70 large and medium-sized cities newly built commercial housing, 50 cities saw a rise in house prices, of which Xining saw the largest increase in month on month (MOM) at 2.8%.
In addition, 17 cities showed a decline in the month on month data, of which Jinan and Luzhou saw the largest decline of 1%.
In terms of second-hand housing, 31 cities rose on a month-on-month basis, with Harbin leading the way with 1.8%; 35 cities saw a month-on-month decline in second-hand housing, with Jinan, Yueyang and Xian seeing the largest month-on-month decline of 0.7%.
New house prices in four first tier cities rose 0.1% month on month, down 0.3 percentage points from last month. Shanghai and Shenzhen led the gains, both up 0.4%; Beijing and Guangzhou fell 0.2% and 0.1% respectively.
Second hand residential sales prices rose 0.1% month on month, down 0.2 percentage points from the previous month. Shenzhen rose 1.0%, while the rest three cities fell: Beijing, Shanghai and Guangzhou fell 0.6%, 0.2% and 0.1% respectively.
House prices in 17 cities fell to a new high in recent two years
21st century economic reporter noted that in terms of month on month, new house prices in 17 cities fell in October, reaching a new high since September 2017.
At the same time, there are two consecutive months of year-on-year decline in the city.
Figure 1: new house prices in 17 cities fell month on month, reaching a new high since September 2017
Among the cities where house prices fell, Jinan and Luzhou saw the biggest declines, down 1% month on month. The first tier cities, Beijing and Guangzhou, fell 0.2% and 0.1% month on month, respectively.
In fact, Jinan has also heard videos of rights protection incidents caused by developers price reduction before, and the situation of the local property market deserves attention.
Figure 2: Jinan and Luzhou saw the largest decline, with Beijing and Guangzhou down 0.2% and 0.1% month on month
Yan Yuejin, research director of the think tank center of E-House Research Institute, thinks that this fully shows that cities are actively reducing prices and promoting sales in October, which helps to form a better price trend. For the entry of buyers, it also means that the cost and pressure of buying houses are decreasing.
In terms of the increase, the price of new houses in 50 cities rose on a month on month basis, and the number was the lowest since February 2018.
Among them, Xining, Hohhot and Nanning, the three central and western capital cities, rose 2.8%, 2.4% and 2.0% respectively in October, which are the only three cities with an increase of more than 2%.
In addition, in terms of second-hand housing, the sales price index of second-hand housing in 70 cities rose 0.1% month on month in October, up 4.2% year on year. In fact, both the month on month data and the year-on-year data show a trend of narrower growth.
The second-hand housing price index of the first, second and third tier cities in October rose 0.0%, 0.1% and 0.1% respectively. In terms of such month on month growth data, compared with the data in September, the growth of all three cities has narrowed.
Price for volume has been effective, and the rise of house prices in 70 large and medium-sized cities has fallen
In September and October, real estate enterprises implemented a series of price reduction and promotion activities, and the effect was finally reflected in the housing price data.
On November 15, the National Bureau of statistics released the changes of house prices in 70 large and medium-sized cities. Kong Peng, chief statistician of the city Department of the National Bureau of statistics, summed up the data with price rises and falls steadily.
In October this year, the sales price of new commercial housing in four first tier cities rose 0.1% month on month, down 0.3 percentage points from last month. Among them, Beijing and Guangzhou decreased by 0.2% and 0.1% respectively; Shanghai and Shenzhen both increased by 0.4%, and the increase dropped by 0.1 and 0.8 percentage points respectively.
Second hand residential sales prices rose 0.1% month on month, down 0.2 percentage points from the previous month. Among them, Beijing, Shanghai and Guangzhou decreased by 0.6%, 0.2% and 0.1% respectively; Shenzhen rose by 1.0%, and the increase dropped by 0.3%.
In the same period, the sales prices of new commercial residential buildings and second-hand residential buildings in 31 second tier cities rose 0.5% and 0.1% on a month on month basis, respectively, 0.1% lower than that in September.
The sales prices of newly built commercial housing and second-hand housing in 35 third tier cities rose 0.6% and 0.5% on a month on month basis, respectively, with the growth down 0.2 percentage points.
Compared with the same period last year, the price increase in the first tier cities has expanded, while that in the second and third tier cities has fallen.
According to the Convention, the real estate enterprises will do a wave of promotion activities for golden nine silver ten every year. Before that, Evergrande and other real estate enterprises also introduced similar measures to trade volume through price concessions.
According to the data released by the National Bureau of statistics the previous day, from July to October this year, the sales area of commercial housing in China was higher for four consecutive months than that of the same period last year. Affected by this, the sales area of commercial housing nationwide in the first 10 months was 1332.51 million square meters, an increase of 0.1% year-on-year, with a positive growth for the first time since this year.
Capital pressure is the main reason for real estate enterprises to choose price for quantity.
In the first half of this year, the regulation and control of the real estate market characterized by the tightening of financing was upgraded again. After a series of actions and statements by the regulatory authorities, the channels of bank loans and trusts were greatly contracted. Although the overseas financing increased, it was obviously unable to make up the gap. At the same time, the peak of debt repayment is coming, and the real estate enterprises are facing the situation of blocking before and pursuing after.
Analysts pointed out that this round of promotion did not really alleviate the financial pressure of real estate enterprises. In the first 10 months of this year, real estate enterprises paid in 1.45 billion yuan, an increase of 7.0% year-on-year, and the growth rate fell again after a brief increase in September. And in accordance with the Convention, real estate enterprises tend to increase sales at the end of the year, thus impacting the annual sales target.
Therefore, it is expected that the real estate enterprises will continue to adopt the price strategy, and the housing prices in 70 cities will continue to fall steadily.
Recently, as a traditional industry, real estate has been promoted with the help of the double 11 enthusiasm, including many price incentives.
Appendix: price rise and fall of new and second-hand houses in 70 large and medium-sized cities in October 2019 (sorted by price rise of new houses):
Source: editor in charge of 21st century economic report: Liu Songpeng nbj9949