Second tier cities have received relatively little response, and after the introduction of intensive policies, many real estate markets have seen firsthand news: new housing transactions are active in first tier cities

Financial Focus | First line Insights on Real Estate Markets in Multiple Regions after Intensive Policy Implementation

From clarifying the standard of "recognizing a house but not a loan" for the first home, to continuing the implementation of the personal income tax preferential policy for residents to exchange houses, and then guiding the reduction of interest rates on existing housing loans, optimizing and adjusting housing credit policies... Recently, a series of real estate policy optimization adjustments have continuously enriched the policy control toolbox.

Recently, reporters visited the real estate markets in Beijing, Shanghai, Zhengzhou, Changsha, Huizhou, Huainan and other places and found that the real estate markets in first tier cities, represented by Beijing and Shanghai, were active in transactions, greatly boosting the confidence of homebuyers. The performance of second - and third tier cities was relatively flat, and trading sentiment still needs to be transmitted.

Active trading of new houses in first tier cities

"In the first weekend after the introduction of the new policy, the daily visit and transaction volume significantly increased, 2.5 to 3 times higher than before." The marketing manager of Jinmao Mansion in Putuo, Shanghai told reporters that after the implementation of the "house recognition but not loan recognition" policy, customers' confidence in purchasing a house can be clearly felt.

According to Guan Chong, the General Manager of Jinmao East China Region, the down payment ratio for homeless households whose loans have been fully repaid has decreased by 3.5% from 70%, leading to a significant increase in their purchasing power. "We have found that many customers who are preparing to exchange can afford the down payment, which has to some extent promoted the growth of transaction volume."

The Shanghai Putuo Jinmao Mansion project received numerous weekend consultations. Photo by Xinhua News Agency reporter Zheng Juntian

In the first half of the year, the transaction heat of suburban markets with few customers suddenly increased. A certain real estate project located in Jiading, Shanghai sold over 60 units on Saturday. "Customers are all brought over by distribution channel providers, and now intermediary agencies have accumulated a sufficient number of rigid improvement customers. Homebuyers who were originally holding money and watching suddenly encountered favorable policies and began to take action," a person in charge of an intermediary agency told reporters.

Mr. Luo, a technology worker who developed from Shandong to Shanghai due to job transfer, bluntly stated, "I am a beneficiary of the policy of 'recognizing a house but not a loan'. According to the original policy, homebuyers who previously had a loan record were considered second home buyers and had to pay 70% of the down payment to purchase. However, I have been working for less than 5 years now and do not have that much savings. After the new policy is introduced, I only need 35% of the down payment to 'get on the car', and my monthly salary can cover the loan."

In Beijing, during the first weekend after the implementation of the "house recognition but not loan recognition" policy, some real estate projects were crowded with people, and some of them received hundreds of groups of customers on a daily basis. On September 2nd, China Construction Puyuan completed a transaction of 2.18 billion yuan and sold 268 sets; On the 3rd, Rongchuang No.1 Courtyard, a high-end real estate project in Beijing, grossed 5.62 billion yuan in one day. Many properties even notify salespeople to be on standby 24 hours a day, and the sales offices are not closed.

After the implementation of the policy of "recognizing houses but not loans", the activity of the new housing market in first tier cities has significantly increased, and at the same time, the demand for replacement housing has led to an increase in the number of second-hand housing listings. According to institutional data, the number of listings in Beijing and Shanghai has increased by over 4000 and over 3000 respectively in recent times. "Many customers with improvement needs want to exchange, but in order to meet the qualification for the first down loan, they need to sell their properties first, which increases the number of listings," said the head of a large intermediary store.

The real estate market in second tier cities has received relatively little response

Compared to the enthusiasm for buying houses ignited in first tier cities, second tier cities appear mild.

On September 1st, Changsha City announced the implementation of the "house recognition but not loan recognition" policy. Compared to previous working days, there was no significant increase in transaction volume over the weekend. "In recent days, the trading volume has remained basically the same as the same period last week, and there has been no rapid increase. However, in terms of new houses, there has been a slight increase in daily transactions," said Ming Bin, Deputy General Manager of Hunan New Environment Real Estate Brokerage Chain Co., Ltd.

On August 3rd, Zhengzhou City launched 15 policy measures to boost confidence in the real estate market, including deed tax reduction, housing subsidies, and "not recognizing loans", and encouraged commercial banks to lower the interest rates of existing personal housing loans. At present, the 15 new policy measures introduced in Zhengzhou have reached their full moon, and the market is gradually rippling.

Wang Yongguang, Chairman of Xinglian Mango Group, a local real estate development enterprise in Henan, said that after the introduction of 15 real estate policies in Zhengzhou, the market began to show signs of improvement in mid to late August. The sales volume of new houses in several of the company's properties has significantly increased compared to July. Hard demand is the main force in purchasing houses, but Zhengzhou has a large inventory of residential properties, and market expectations have not significantly reversed. Market recovery still requires some time.

According to statistics from Beike Research Institute, after the new policy reached its full moon, the transaction volume of second-hand houses in Zhengzhou increased by about 10% month on month, with the most significant impact on the improvement of customer groups. The proportion of transactions with improved customers for new houses increased significantly, but the proportion of price increases for second-hand houses listed on the market decreased by about 2.7 percentage points, indicating a decrease in homeowner expectations.

A real estate agent from Zhengzhou Shell Company told reporters that there has been a significant increase in inquiries about buying houses recently, and some new properties have shown signs of recovery in sales. For example, a property has sold over 40 units in the past week, which is relatively rare this year.

Yan Yuejin, Research Director of E-House Real Estate Research Institute, stated that currently, real estate transactions in first and second tier cities with a total price of 3 million to 5 million yuan are the most active. With the initiation of rigid improvement demand, the entire replacement chain begins to rotate. It is expected that in 1 to 2 months, customers with a price range of 5 to 8 million yuan will begin to "emerge", and then rotate the mid to high end market with a price range of over 8 million yuan. With the continued effectiveness of new policies, the demand for mid to high end residential properties in the market will be further released, and the demand for improvement in pursuing good houses and communities will be more active in the market.

Third tier cities show a differentiated trend in transactions

The real estate market in third tier cities has shown a state of differentiation.

In Guangdong, Huizhou, adjacent to Shenzhen, can feel the active heat of the real estate market. Mr. Deng from Heyuan City, Guangdong Province is planning to buy a "one-step" large apartment in Huicheng District. On August 26th, he saw a 143 square meter four bedroom apartment in the Ma'an area of Jinshan New City, Huizhou City, with a total price of 2.0865 million yuan. He needs to pay a 30% down payment, which is 626000 yuan, and the remaining house payment needs to be borrowed for 30 years, with a monthly payment of 7663 yuan. The down payment of nearly 630000 yuan made Mr. Deng face difficulties.

Recently, Huizhou implemented a policy of "recognizing houses but not loans". Although there is still a property under mortgage in Heyuan, according to the new policy, Mr. Deng's down payment can be reduced to 20%, and the monthly payment has only increased by 20 yuan. "After the implementation of the new policy, the monthly supply is almost the same, saving 209000 yuan on the down payment. I can now go buy my favorite property!" Mr. Deng said happily.

However, in Huainan City, Anhui Province, homebuyers have less obvious perception of the new policy. Mr. Chen, who has been considering buying a wedding house, is still watching. "New policies that are beneficial to the real estate market are constantly being introduced, but I feel that the pace of my target property is very slow. Therefore, I will slowly choose according to my own pace and not rush to sell it."

Song Hongwei, Research Director of Tongce Research Institute, believes that from the perspective of the impact of the new policy on the market, cities with higher energy levels have more obvious effects, and first tier cities such as Beijing and Shanghai are expected to usher in a wave of replacement and improvement. With the gradual transmission of transaction heat in the real estate market of first tier cities, transactions in second tier and third - and fourth tier cities will also gradually become active.