According to the mainland media “First Financial” reported that the average unit price of second-hand housing in a total of 17 cities on the mainland exceeded 20,000 yuan per square meter, mainly concentrated in the southeast coastal region. Among them, Shenzhen‘s unit price far exceeds that of the north, topping the country, close to breaking the 100,000 mark. Some analysts point out that the government must increase its efforts to regulate housing prices, otherwise it will threaten social stability and damage the economic environment.
First Financial reported that among more than 300 cities on the mainland, 77 cities had an average unit price of more than 10,000 yuan per square meter for second-hand homes, and in four provinces on the southeast coast – Jiangsu, Zhejiang, Fujian and Guangdong – more than half of the cities had a unit price of more than 10,000. In addition, there are 8 cities where the unit price exceeds 30,000 yuan/sq.m. The average unit price of second-hand residences in Shenzhen has reached 90,049 yuan in January 2021, which is 1.35 times higher than Beijing, 1.45 times higher than Shanghai and 2.2 times higher than Guangzhou, hitting another record high. Meanwhile, the average price of a new Home in Shenzhen is 61,543 yuan, also ranking first in the country.
According to the National Bureau of Statistics of the Communist Party of China (NBSC), which announced last month the changes in the sales prices of commodity residential units in 70 large and medium-sized cities in December 2020, Shenzhen’s house prices rose 34.25% year-on-year in December last year, with an annual increase of up to 14.1%, also ranking first in the country.
Analysts: multiple factors to promote the southern house prices soared
Zou Tao, a financial commentator in Shenzhen who launched the “house prices do not fall not to buy a house campaign”, said that Shenzhen as one of the four first-tier cities, preferential policies, economic activity, attracting a large influx of people, residential demand is strong. Coupled with the influx of capital, it is not surprising that housing prices remain steadily high: “Shenzhen itself has a large population and little land, especially residential land, demand is relatively high; the atmosphere of real estate speculation in Shenzhen is thicker than any other city in the country, leading to irrational increases in housing prices. The government still needs to be strengthened in terms of supervision, including market information transparency and housing security for the people, there is still a gap.”
Financial analysis blogger “financial cold eyes” also believes that a large number of funds from the north south, Inflation is an important factor in the soaring prices in the south: “(affected by the Epidemic) the economic decline in the north, the northern property market generally fell, a large number of funds south to Shenzhen speculation. In addition, the central bank printing money is a monetary factor. In order to save the economy, the government expanded the currency at a rapid pace last year, and prices rose sharply from property and stocks to commodities, Food and daily necessities. Together with residents buying houses for investment and fighting inflation, together pushed up the price of housing in the south.”
In addition, Zou Tao analysis, due to the turbulent situation in Hong Kong, Hong Kong residents flocked to Shenzhen, pushing up the role of housing prices is limited: “Although Shenzhen to Hong Kong some policies, but Hong Kong people in Shenzhen to buy a house has been more, Hong Kong’s house was much more expensive than Shenzhen, but now Shenzhen prices in some respects have been higher than Hong Kong.”
Government regulation is still lacking long-term high prices damage and development
Zou Tao said, Shenzhen high prices in recent years has been reflected in the negative effects of enterprise, talent loss, etc.: “In Shenzhen, many companies moved out, including huawei, also because Shenzhen prices are too high to move to Dongguan. Including young people, because the pressure of Shenzhen house prices are too high, also left Shenzhen. As a general young people to Shenzhen, it is more difficult to buy a house on salary alone.”
According to the official website of the National Bureau of Statistics of the Communist Party of China, the national per capita disposable income of residents in the first half of 2020 was 15,666 yuan, which was evenly spread to 2,611 yuan per month, and the national per capita wage income was 9,010 yuan per month. In addition, according to the “Salary Trends in Guangdong Region 2020-2021” released by the Southern Talent Market on the mainland, the average monthly salary in Shenzhen is 10,213 yuan per month, just under 10,000. If you rely on your salary to buy a house, you can almost only sigh in hope.
Meanwhile, the out-migration of Shenzhen’s manufacturing industry has formed a trend in recent years. in mid-2017, the Shenzhen Political Consultative Conference released the “deepening supply-side structural reform and growing Shenzhen’s economy key research report”, pointing out that most of Shenzhen’s out-migration enterprises are no longer low-end manufacturing industries, but large and medium-sized enterprises concentrated in the field of electronic information manufacturing.
Zou Tao believes that the stabilization of housing prices by the market alone is not enough, the government needs to increase regulation and control, and coordinate policies in many aspects to solve the problem of high housing prices: “The government still introduced many measures, but these measures do not solve the key problems. To solve the problem of speculation should start from solving the problem of bank credit. But the government’s policy philosophy in addressing rising commodity housing prices is more about health and stability. What is happening now is that the government is trying to maintain the status quo as much as possible. The government’s ultimate goal is not to see house prices fall, it wants them to rise steadily. In the long run, the solution to the problem of housing prices still depends on the government’s efforts in terms of protected housing and ‘rent and sell’.”
“Financial cold eye” also believes that the government’s efforts to regulate housing prices is far from enough: “Shenzhen new house purchase restrictions, to the second-hand house transactions to determine the guide price, but the strength is not enough. The government can also raise the down payment, sales restrictions and other aspects of the suppression of housing prices. But Shenzhen city development area is limited, only reclamation or to the surrounding suburbs to expand.”
The guiding price mentioned by “financial cold eyes” refers to the “Notice on the Establishment of Reference Price Release Mechanism for Second-hand Housing Transactions” issued by the Shenzhen Municipal Bureau of Housing and Urban Development on February 8, in order to combat speculation and promote the transparency of information and rational transactions in the second-hand housing market. However, there is still a big gap between reality and ideal. Tang Lei, a well-known singer of Shenzhen origin, also lamented on social media platforms that today he has an empty Shenzhen account and cannot afford to buy a house back in Shenzhen.
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