In the past about 20 days, the first-tier cities of Shenzhen and Shanghai have intensively regulated their property markets, raising concerns. The mainland property market is showing instability amid the ongoing Epidemic, with an increase in the number of cities on the mainland where second-hand property prices have fallen, and a steady decline in second-hand property prices in Beijing since early February.
Officials in Shanghai and Shenzhen have repeatedly regulated the property market in the past 20 days
Shanghai regulated the property market at least five times from Jan. 21 to Feb. 6.
On the evening of January 21, Shanghai issued “Shanghai Ten”; on the 25th, “foreclosure” was included in the purchase restriction; on the 29th, eight measures were implemented, including real estate loan concentration management; on February 2, multiple departments in Shanghai interviewed major real estate brokers, sales agents and representative real estate companies; on February 2, Shanghai’s real estate market was regulated at least five times. On February 6, the new regulations of the “Shanghai Ten Articles” concerning the shaking of new houses were officially implemented, and those who have high points will be able to participate in the shaking of new houses.
Shenzhen has also introduced property market-related policies five times in the past 20 days. For example, families can only register the purchase of commercial properties in the names of eligible members, and reference prices for second-hand housing transactions were released for 3,595 residential areas in the city.
Beijing also showed signs of regulation, with the vice minister of the Ministry of Housing and Urban-rural Development of the Communist Party of China visiting the city on February 10 to investigate real estate regulation; on February 1, the regulator asked intermediaries to reduce the frequency of “showings”, with each house being viewed by no more than two groups of buyers in a week, and not to participate in “business loans” or “down payment loans”. “, “down payment loans”, “consumer loans” and so on.
Frequent regulation of the mainland property market is not good?
The mainland media described the property market as “up and down polarization”. According to data from the National Bureau of Statistics of the Communist Party of China alone, the prices of second-hand homes fell in 26 of the 70 large and medium-sized cities in 2020, more than the 16 in 2019. Tianjin, Zhengzhou, Taiyuan, Harbin and Jinan are among the top decliners.
According to mainland media reports, house prices in Shanghai and Shenzhen are currently rising, while those in Beijing continue to fall. the average price of second-hand houses in Beijing from Feb. 1 to Feb. 7 was 55,757 yuan per square meter, down 1.11 percent from a year earlier, and down from a year earlier for three consecutive weeks.
However, data from the Shell Research Institute showed that second-hand house prices fell in January this year in the first-tier cities of Fangshan and Shunyi in Beijing, and Yantian in Shenzhen; second-hand house transactions in Langfang, Dalian and Yantai fell by more than 20 percent year-on-year.
In early February, the mainland’s Xinjing News reported that a netizen, “Thick Earth,” said he was willing to “give away a property in Yanjiao Tianyang City (which still has a loan) on a first-come, first-served basis and pay off the loan himself,” doing so because of insolvency. “The current unit price of Tianyangcheng is only 17,000 or so, and the outstanding loan of this house is basically the same as the market price. …… is losing more and more money, I have taken in more than 400,000, and if I pay it back again, I will lose more.” He said.
Yanjiao is 30 kilometers from the center of Beijing, and its housing prices are known as a barometer of the city’s property market. In late January, mainland media reported that second-Home prices in Yanjiao had fallen to five years ago.
Dr. Xie Tian, chair professor at the University of South Carolina Aiken School of Business, said in an interview with Voice of Hope that this is definitely not an isolated case, “because when this kind of thing comes to light, it’s often the tip of the iceberg, and there are probably at least dozens, hundreds or even more in the same area, in China. Beijing-wide and nationwide is considered a big social problem. Now it’s just that some are not exposed, some cannot be reported, some for various reasons, and people don’t know how to deal with them yet. But this huge panic, a huge group of people facing such a dilemma of not being able to pay back their mortgage, falling housing prices and very high loans, should be very, very common.”
Li Xunlei, chief economist at China Tai Securities, expects that the number of cities with falling house prices will exceed the number of cities with rising prices in the next five years.
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