Is the Zhengzhou real estate market booming?, One week implementation of "house recognition but not loan recognition" in Zhengzhou | housing resources | real estate market
Since the release of the "Notice on Further Promoting the Stable and Healthy Development of the Real Estate Market in Zhengzhou City" on August 3, Song Dong, a real estate broker in the eastern district of Zhengzhou, has felt a bit of warmth. The number of active inquiries from customers has increased. "The increase in consultation and viewing volume will drive transaction conversion, which is the stimulating effect brought by the new policy."
However, based on the performance in the past week, the real estate market in Zhengzhou has not improved significantly, and the listing prices of second-hand housing are still declining. In terms of data, in just over a year, the number of second-hand houses listed in Zhengzhou has increased by more than 30000, with a total number of listings exceeding 100000. Industry insiders believe that the introduction of this new policy may have a further promoting effect on the demand for improved housing, but its boosting effect on the overall market is relatively weak.
The consultation volume has increased, and the area has transactions every day
After the Ministry of Housing and Urban Rural Development expressed its support for the "housing recognition without loan recognition" policy at the end of July, Zhengzhou became the first city to implement this measure, and promoted the stable and healthy development of the real estate market through 15 measures such as talent housing, subsidies for families with multiple children, lifting sales restrictions, reducing taxes and fees, and installment payment of land payments.
This is not the first time Zhengzhou has introduced measures to stabilize the real estate market. In March 2022, Zhengzhou City introduced 18 new real estate policies, including guiding the reduction of housing loan interest rates and promoting monetary resettlement. In June 2022, the first home loan interest rate was lowered and the down payment ratio for second homes decreased. Yan Yuejin, Research Director of E-House Research Institute, said that looking back at policies in various regions over the past two years, it can be seen that Zhengzhou often takes the lead. The implementation of these 15 measures marks the official start of a new round of policy easing.
Song Dong said that since around 2018, the performance of the real estate market in Zhengzhou has not been very good, especially in the past two years. After this year's Spring Festival, the market has slightly warmed up, with an increase in viewing and trading volume, but it has since become more sluggish.
Song Dong said that after the release of the new policy, the number of customers who actively consulted has increased, and the number of people who saw it has increased. "Our platform has statistics on the number of people who saw it, and currently it seems that there has been some improvement. The increase in the number of consultations and people who saw it will drive the conversion of transactions, which is the stimulating effect brought by the new policy."
Another Zhengzhou real estate agent, Chen Yu, also said that in the past week, the number of customer inquiries has started to increase. In his area, there are daily transactions of properties, although the number is not large, there are signs of improvement. "Now the down payment ratio and loan interest rate are the lowest in recent years, and buyers are relatively strong. The price of sincerely selling properties can be negotiated."
A total of 410000 yuan has been reduced in price for a two bedroom apartment in the Louvre Mansion in Xinli. But Chen Yu's analysis shows that in the past few years, housing prices in Zhengzhou rose too quickly, causing those who bought at high prices to suffer significant losses. Some even lost their down payment. Therefore, even though policies have been relaxed, it is still difficult to raise prices in the short term. From the performance of second-hand houses, the listing price is still declining. For example, a two bedroom apartment in Xinli Louvre Mansion in Zhengdong New Area was listed for 1.65 million yuan in October 2021. By August 8th this year, the listing price had dropped to 1.24 million yuan, a decrease of 410000 yuan; A three bedroom apartment in Mayflower City has been reduced in price by a total of 280000 yuan within one year.
Unprecedented listing volume surged
Over 100000 second-hand housing units
Lu Lin has long worked for a large real estate company in Henan, which is an important participant in the real estate market in this provincial capital city. He analyzed the China News Service and said, "The policies such as housing subsidies and tax reductions in this new policy are definitely beneficial to the market, but these are not the main influencing factors. The key is still to see the supply and demand relationship."
Lu Lin stated that Zhengzhou began implementing a three-year sales restriction on new houses in May 2017, and due to the time required for certification, it would take about 5 years for new houses to be converted into second-hand ones. With the lifting of sales restrictions, a large number of properties have been listed, and the supply of second-hand houses has rapidly increased.
The current number of second-hand housing listings in Zhengzhou City is 111800 and 144200, respectively, for Beike and Zhuge properties. Based on previous data, as of the end of June 2022, there were approximately 79000 second-hand housing units on Beike's housing search platform in Zhengzhou. In just over a year, the number of second-hand houses listed in the city has increased by over 30000.
According to media reports, after the release of the new policies in Zhengzhou, the number of second-hand housing listings has surged. According to a search by Zhongxin Jingwei in Zhuge, there are 2677 newly listed second-hand houses in Zhengzhou, which is not a significant increase compared to the total listing volume of over 140000 units on the website. Song Dong also said that the number of second-hand housing listings in Zhengzhou has been increasing, but it has not suddenly increased significantly.
Lu Lin believes that due to factors such as land prices and construction costs, the price of new houses is unlikely to fluctuate, and the decrease in second-hand house prices and transaction costs makes many second-hand houses more cost-effective than new houses. The supply of second-hand houses is too large, leading to small homeowners competing to lower prices.
Although prices have weakened, the relevant person in charge of the China Index Research Institute told China News Service that the new policy cancels restrictions on sales with the prerequisite of "purchasing improved housing". At the same time, Zhengzhou changed the restrictions from 3 years to 1 year last year. The policy adjustment scale of this conditional cancellation of restrictions is not large, which leads to a lower possibility of so-called "selling".
According to data compiled by the Zhengzhou Housing and Real Estate Industry Association, a total of 54383 second-hand houses were sold in Zhengzhou from January to June 2023, an increase of approximately 85.72% year-on-year from 29282 houses in January to June 2022. Based on an average monthly transaction of 9063 units and a rough estimate of 111800 listings in the first half of this year, the turnover cycle of second-hand houses in Zhengzhou exceeded 12 months.
"In the past few years, new urban areas in Zhengzhou have been built one after another, with a large supply of housing. Now it's time to respect market rules," said Lu Lin.
Significant differentiation and market improvement still need time
Although the overall real estate market in Zhengzhou is sluggish, internal differentiation is also quite obvious, and improved residential projects are relatively resistant to decline.
Chen Yu's area includes some residential communities that were built earlier and have average living environments, as well as secondary new projects with better supporting facilities and environments. He said, "Although the listing prices are decreasing, the decline in old communities is more significant, while the decline in secondary new communities is relatively small, or even not."
Longzhimeng East Garden, located on the north side of Dongfeng Canal in Zhengzhou East District, is an improved residential community in the area. According to a search on the real estate trading platform by Zhongxin Jingwei, the total listed price of most of the properties for sale in this community ranges from 3.3 million yuan to 7 million yuan. From the trend of listed prices, the price reduction of most properties is within 200000 yuan. Some residential areas on the south side of Dongfeng Canal, such as Old Street Green Space, have seen a significant decrease in total price compared to Dragon Dream East Garden, with cumulative price reductions of hundreds of thousands of yuan.
Song Dong said that the broadcasting and television Tianyun community in the Longzihu area is supported by relatively high-quality school districts, and except for a few properties, the price reduction of most properties for sale is not significant. He said, "Firstly, school district housing is already resistant to decline, and secondly, the living environment in the community is good, so the decline is controllable. In the future, improved housing will be more able to withstand the downward cycle of the market."
"Previously, there were several real estate developments near Zhengzhou East Station that attracted many investors to purchase. After the houses were delivered, they were directly rented out. However, currently these communities are facing problems such as poor property management, a large number of tenants, and high plot ratio, which have affected the prices of second-hand houses." Lu Lin believes that in a good market, some communities may experience a general increase due to their good location. However, with the reduction of investment behavior, the residential properties of residential properties become more important. Some old communities and sub new communities with poor property, supporting facilities, and layout will inevitably fall into a significant price drop.
The relevant person in charge of Zhongzhi Research Institute analyzed that in the past few years, Zhengzhou has been greatly affected by multiple rounds of impact from the epidemic and floods, and the urban economy and real estate industry have been greatly affected. Residential transaction volume has continued to decline, and there is significant pressure on housing prices to decline. Since the beginning of this year, residential transaction volume has rebounded year-on-year, new house prices have remained stable with a slight decline, and the steady state of the enterprise has begun to show, especially in improving the sales performance of projects. After the introduction of this new policy, it may have a further promoting effect on the demand for improved housing, but its boosting effect on the overall market is weak. The current macroeconomic environment and urban employment income have not significantly improved, and the short-term pressure on the market is still significant. Lu Lin judged that the introduction of policies may be able to stop the decline or reverse the marginal trend of decline, but if we want to change the overall situation, we still need to wait for time.
