2022年1月17日

Home price data for 2021 ended with an important sign of recovery

China New Finance and Economics January 15 (Zuo Yukun)15, the National Bureau of Statistics announced in December 2021 commercial housing sales price changes statistical data. In the last month of 2021, the sales prices of commercial housing in 70 large and medium-sized cities continued the downward trend from the fourth quarter on the whole, with the year-on-year increase falling.

It is worth noting that the December data sent a positive signal, with the industry seeing a slight check on the persistent pessimism in the housing market.

资料图:城市高楼林立。 <a target='_blank' href='/' rel=中新社记者 王东明 摄” src=”https://www.chinanewsweb.com/wp-content/uploads/2022/01/20220115_61e261e9deecf.jpg” style=”border:px solid #000000″ title=”资料图:城市高楼林立。 中新社记者 王东明 摄” />
File photo: High-rise buildings in the city. Photo: China News Service/Wang Dongming

“Frozen” half a year, the market is warm

“Overall, the main feature of housing prices in December is the gradual bottoming of the market with the stabilization of the regulatory policy and the increase of credit supply.” Centaline property chief analyst Zhang Dawei said.

New home prices in first-tier cities fell 0.1 percent month-on-month in December from flat in the previous month, while second-hand home prices rose 0.1 percent from a 0.2 percent decline in the previous month, according to the National Bureau of Statistics.

In addition, the sales prices of new commercial and second-hand homes in second-tier cities both fell 0.3 percent month-on-month, which was 0.1 percentage points narrower than the previous month. New home prices in third-tier cities fell 0.3 percent month-on-month, the same decline as the previous month. Sales prices of previously owned homes fell 0.5 percent month-on-month, expanding 0.1 percentage points from the previous month.

2021年12月70个大中城市新建商品住宅销售价格指数。 截图自国家统计局官网
December 2021 New commercial housing sales price index of 70 large and medium-sized cities. Screenshot from the official website of National Bureau of Statistics

“The important signal in the house price index is that while the month-on-month decline has continued, the decline has not widened and has even narrowed slightly.” Yan Yuejin, research director of e-House Think Tank Center, believes that this is a positive place.

A rally is not stability, nor is a crash. In 2021, the housing price of 70 cities in China as a whole will be overheated in the first half of the year and too cold in the second half. According to Zhang dawei, an average of 87 percent of cities in 70 major cities saw price declines in November, making the second half of 2021 the fastest half year of price declines on record.

At the same time, the rapid decline also means that the adjustment cycle is likely to be relatively short, 70 city housing price data also slowed the decline in December. Zhang Dawei believes that from the overall view, although the market is still low, but has gradually stabilized.

First-tier cities were the first to pull out of the downturn

“This is the first time in this market downturn that the decline has narrowed.” Xu Xiaole, chief market analyst of Shell Research Institute, said nine out of 70 cities saw month-on-month declines in new home prices in December, while the decline in second-hand home prices in about 50 percent of cities narrowed or stopped.

Four first-tier cities were the first to hit the brakes in a downturn. In December, the price of new houses was flat in Beijing, up 0.4% in Shanghai, down 0.6% in Guangzhou and down 0.1% in Shenzhen. In terms of second-hand home sales prices, Beijing and Shanghai rose 0.8 percent and 0.4 percent, while Guangzhou and Shenzhen fell 0.3 percent and 0.4 percent, respectively. On the whole basic stop drop stability.

2021年12月70个大中城市二手住宅销售价格指数。 截图自国家统计局官网
December 2021 second-hand housing sales price index of 70 large and medium-sized cities. Screenshot from the official website of National Bureau of Statistics

“The fundamentals of this kind of city are good, the purchase demand support is strong, after the improvement of the credit environment, the early wait-and-see demand into the market, transaction activity increased, driving the decline in housing prices narrowed.” Xu believes that the market’s ability to narrow its decline after several months of decline shows the resilience of demand in China’s property market.

Yan yuejin also pointed out that Beijing’s second-hand housing prices have seen the biggest rise in both month-on-month and year-on-year growth, which requires Beijing to pay close attention to the second-hand housing market. “Watch out for the supply of new homes in particular. If the supply of new homes doesn’t come through, that pressure will start to shift to the resale market.”

Housing recovery, led by improved credit, may turn negative in the second quarter

“It is safe to say that the market downturn in 2021 is mainly due to tighter financial conditions rather than any problems with market demand.” Xu Xiaole said. And drive this decline narrow, is the same credit policy began to gradually release positive effect.

In the fourth quarter of 2021, the marginal improvement of the financial credit environment promoted the bottom of the market volume of transactions, and the improvement of market expectations slowed down the pressure of falling housing prices. Shell Research institute data show that since October 2021, shell 50 city second-hand housing turnover rose for three consecutive months, representing market expectations of second-hand housing index also stopped falling in December.

“The December data sent a positive signal, at least indicating that housing prices will not blindly fall or expand the decline, and there is a possibility that housing prices will stabilize after the effect of the policy appears.” Yan expects a slight decline in the first quarter of 2022, but the second quarter will turn from negative to positive.

“At present, the credit backlog has eased significantly in many cities. In Beijing, for example, the basic mortgage cycle has been shortened from 4-6 months in the third quarter to about 3 months.” Zhang Dawei also believes that with the gradual easing of mortgage loans, the biggest factor affecting the real estate market recently, it is expected that the market will clearly stabilize after the policy bottoming in the second quarter of 2022. (after)

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