China Thailand macro: population migration market points in 2019: price trend from population flow

 China Thailand macro: population migration market points in 2019: price trend from population flow

In terms of specific provinces, the flow of population has become more concentrated. In 2019, the net inflow of population in Zhejiang and Guangdong reached 841000 and 826000, far ahead in China. According to our calculation, more than 70% of the populations net migration flows to Zhejiang and Guangdong, compared with only about 60% in the previous two years. It is not so much that the population flows to the eastern and southern provinces, but rather that the more concentrated areas flow to Guangdong and Zhejiang provinces, 28 phenomenon is more and more obvious.

The flow in the province is similar to that in 2018, and the population continues to focus on the provincial capital and the core cities of Twin Star. Within each province, only a few cities, such as the provincial capital, have a net inflow of population, and most cities are under the pressure of a net outflow of population. For example, in Jiangxi, Shanxi, Henan, Hubei, Shaanxi, Gansu and other places, basically only 1~2 urban population are in the net inflow, and the rest are in the net outflow.

Even if the population flows into big provinces, it is not blooming everywhere. Take Zhejiang Province as an example. In 2019, the net population migration scale ranks first in China. Of the 11 prefecture level cities in Zhejiang Province, 4 cities have net population outflow. The remaining seven cities are net immigrants. But in terms of scale, in fact, most of the net inflow population of Zhejiang Province flows to Hangzhou and Ningbo. Among them, Hangzhou has a net population of 493500, and Ningbo has a net population of 300700, accounting for more than 90% of the total net immigration of all cities in the province.

The situation of Guangdong, another province with a net inflow of population, is similar. Most of the population flows to Shenzhen, Guangzhou and Foshan. The population migration scale of other cities is relatively small, and some cities are even in a net outflow.

The war to attract talents is getting fiercer and fiercer, and the new front line is making great efforts

From the perspective of the situation of cities at all levels, the first and second tier cities continue to have a net inflow of population, while the third, fourth and fifth tier cities continue to have an outflow of population.

Among the first tier cities, Beijing and Shanghai still maintain the total population control policy, while Shenzhen and Guangzhou continue to have a net inflow of population. In 2019, the net population of Beijing will continue to move out, but the scale of net migration will shrink from 220000 in 2018 to 63000. Although Shanghai maintains a net inflow of population, the scale is less than 10000. However, the population of Shenzhen and Guangzhou is in a large inflow. In 2019, Guangzhou has a net inflow of 250000 people. Although the natural population growth data of Shenzhen has not been published, the net inflow volume is estimated to be about 300000 according to the increase of permanent population.

The new first tier cities have joined the team of attracting talents, and the scale of population migration has increased significantly in the past two years. For example, in Hangzhou, Nanjing and other new first tier cities, in addition to their economic attraction, they are also increasing their efforts in talent attraction policies, not only relaxing the settlement policy, but also providing corresponding treatment in talent subsidies, rental subsidies, house purchase subsidies and other aspects. In 2017, the net population of new first tier cities moved in less than 900000, and in 2019, it has increased to 1.4 million.

In 2018, Anhui Province and Xian city were the most successful in attracting talents. In 2018, the talent policies of all parts of Anhui Province were greatly relaxed, which was also the peak of the net inflow of Anhui population. But this grand occasion only lasted for one year. In 2019, the net inflow of population in Anhui province slowed down significantly, and the scale of net inflow was even lower than the level before 2018. From the perspective of prefecture level cities, in 2018, almost all cities in Anhui province had a net inflow of population. By 2019, six cities had a net outflow of population. Xian is similar. Although there are still 130000 net inflows in 2019, it is also significantly slower than 320000 in 2018.

This also shows that if we want to continue to attract population, it is not enough to rely on high-cost talent policy. The key lies in the sustainable development of economy and industry.

Almost all the third, fourth and fifth tier cities continue to face the pressure of continuous net outflow of population. Moreover, in the 206 cities we calculated, even if the natural growth of population is not excluded, the permanent population of 28 cities in 2019 will also increase negatively.

Small cities continue to flow out and real estate adjustment is under great pressure

In the long run, population is the key factor affecting house prices. Japans housing prices rose all the way before the 1990s, corresponding to the era of the growth of working age population and rapid urbanization rate. Since then, housing prices have dropped significantly. Of course, there are real estate bubble bursts, but why havent they gone back for so long? Population or key, Japans working age population peaked in the mid-1990s, and then continued to decline; after the 1990s, Japans urbanization rate slowed down significantly, which means that the population fundamentals supporting housing prices have changed significantly.

We also made statistics on the price increase and the change of permanent population in China from 2018 to 2019, and found that there was a positive correlation between the two. With the exit of real estate stimulus, the impact of population on housing prices will become more and more obvious. Where the population continues to flow out, the pressure of housing price adjustment will be greater in the future. In fact, the adjustment pressure of the real estate market in small and medium-sized cities has been continuously reflected since 2018.

Even in cities with population inflow, the real estate market may have different performance. Wang et al. (2017) analyzed the proportion of non household registration population and housing price data in Chinese cities, and found that every 1% increase in inter regional population migration will lead to a 0.7% increase in housing price. The study also found that not all the population migration has a push up effect on housing prices, and the net migration of the population with higher education level has a greater impact on housing prices.

Author: Zhongtai securities