New changes have emerged, with the latest housing prices in 70 cities announced | Second hand housing | First line | Policy | Price | Market | Demand | City

On June 15th, the National Bureau of Statistics announced the changes in the sales prices of commercial residential properties in 70 large and medium-sized cities in May 2023.

Data shows that in May, the overall increase in sales prices of newly-built commercial residential properties in 70 large and medium-sized cities decreased compared to the previous month, while second-hand residential properties decreased compared to the previous month. The year-on-year increase in sales prices of commodity residential properties in first tier cities has fallen, while the overall year-on-year decline trend in second - and third tier cities has slowed down.

In addition, among the 70 large and medium-sized cities in May, the number of cities with a month on month increase in sales prices of commercial housing decreased. There were 46 cities with a month on month increase in sales prices of newly-built commercial housing and 15 cities with a month on month increase in sales prices of second-hand housing, a decrease of 16 cities and 21 cities with a month on month increase in sales prices of newly-built commercial housing.

The overall month on month increase in new house prices has fallen

Let's take a look at newly-built commercial housing. In May, the sales price of newly-built commercial housing in first tier cities increased by 0.1% month on month, a decrease of 0.3 percentage points from the previous month. Among them, Beijing, Shanghai, and Guangzhou increased by 0.2%, 0.3%, and 0.1% month on month, respectively, while Shenzhen decreased by 0.2%; The sales price of newly-built commercial residential properties in second tier cities increased by 0.2% month on month, a decrease of 0.2 percentage points from the previous month; The sales price of newly-built commercial residential properties in third tier cities has remained stable from a 0.2% increase in the previous month.

"The biggest feature of the new housing prices this time is that the month on month increase in the housing price index has narrowed for two consecutive months, indicating that the trend of recovery in the first quarter has not continued, and the recovery is hindered." Yan Yuejin, the research director of E-House Research Institute, said that it is difficult to attract customers for new housing sales in various regions, and real estate companies are facing pressure to sell. Some cities have also seen significant price reductions, which will naturally drive a weak trend in housing prices.

"First tier cities have also experienced hot and cold differentiation, which also occurs between different sectors and real estate projects within the same city." Lu Qilin, Research Director of 58 Anjuke Research Institute, said that many cities are actively introducing promotional methods while relaxing policies, attracting more demanders to accelerate entry through price discounts.

Li Yujia, Chief Researcher of Guangdong Housing Policy Research Center, pointed out that the decline in housing prices in first tier cities this month is more pronounced, mainly due to the significant rebound in the new housing market in the first quarter, and developers have been raising prices since the second quarter. But new citizens and young people concentrated in first tier cities are more sensitive to prices and have always had expectations of price declines, leading to price increases followed by price reductions.

"In addition, with the increase in the number of second-hand housing listings and the impact of price declines on new houses, the phenomenon of price hikes has decreased from April to May, leading to a return to price reduction promotions," said Li Yujia.

The sales price index of newly-built commercial housing in 70 large and medium-sized cities in May 2023. Screenshot from the official website of the National Bureau of Statistics

Second hand housing prices have decreased month on month

From the perspective of second-hand housing, in May, the sales prices of second-hand housing in first tier cities increased by 0.2% month on month and decreased by 0.4%. Among them, Beijing, Shanghai, Guangzhou, and Shenzhen decreased by 0.6%, 0.8%, 0.2%, and 0.1% month on month, respectively; 2、 The sales prices of second-hand residential properties in third tier cities have decreased by 0.3% and 0.2% respectively compared to the previous month, which remained unchanged.

The performance of the second-hand housing market has attracted industry attention. "On the basis of three consecutive months of rising prices, the second-hand housing price index has declined. Given the new situation of increased listings of properties and significantly prolonged second-hand housing transaction cycles since February, we believe that there are problems with the supply and demand relationship of second-hand housing," said Yan Yuejin.

"The increase in liquidity of second-hand housing is necessary to drive the activity of the new housing market." Yan Yuejin said that the current pressure on the second-hand housing market is universal, and various regions need to make the revitalization of second-hand housing one of the important tasks in the near future.

It is worth noting that there has been a significant decline in second-hand housing prices in first tier cities such as Shanghai and Beijing. According to Li Yujia's analysis, firstly, after the market rebounded in the first quarter, more homeowners chose to list their properties. The proportion of properties with longer building ages in Beijing and Shanghai was relatively large. In the context of diverse choices on the demand side, many homeowners chose to lower their listing prices in order to act quickly; The second is the increase in new housing projects entering the market, and the choice to sell at prices lower than second-hand housing, resulting in demand being diverted.

The sales price index of second-hand housing in 70 large and medium-sized cities in May 2023. Screenshot from the official website of the National Bureau of Statistics

The real estate market expects "stable quantity and price"

"At present, the loose policies in the national real estate market have differentiated, and there has been no significant adjustment in first tier cities, while the impact of policies in third - and fourth tier cities has weakened." Zhang Dawei, Chief Analyst of Zhongyuan Real Estate, said that the fundamentals of the real estate market have not fully changed in May, and there have been no strong policies in the market. After the release of accumulated demand in first tier cities, homebuyers continue to wait and see, and the market begins to play games again.

Li Yujia stated that the central bank has lowered its one-year MLF, and it is expected that the five-year LPR will decrease, which is expected to provide some support for the future. But the most crucial thing is that the demand side can actively help new citizens and young people's employment and income, and the supply side can timely control the risks of developers. Otherwise, the interest rate reduction policy at the financial level will be difficult to support the stability of real estate prices.

"A healthy real estate market is one where both quantity and price remain stable. It requires simultaneous efforts from both the supply and demand sides in the context of housing, living and not speculation." Lu Qilin believes that the overall recovery of the real estate market this year will still show ups and downs, with alternating upward and downward trends. There is still a possibility of a "double dip" in the short term, and synchronous support from both the supply and demand sides is needed in the short term.

Lu Qilin stated that the current demand for home purchases has shifted from basic needs to improved needs, with over 60% of the demand in core cities being for replacement. The "sell first, buy later" process of buying a house requires comprehensive promotion of "transfer with collateral", and the policy of "recognizing loans but not recognizing houses" also needs to be fully promoted in key cities.