January 15, 2021, the National Bureau of Statistics released the December 2020 70 large and medium-sized city house price changes, while maintaining a consistent and stable trend, the 70 city house price increase in the end of the year "tailing" market. This also reflects that the resilience of the real estate market can not be underestimated.
Looking at the whole year of 2020, the impact of a number of factors, so that the curve of house price increase is quite volatile, can be roughly summarized as follows: the first quarter of the downturn, the second quarter of the rebound, after the third quarter of the turn into the adjustment, the tail in December. Among them, after entering the fourth quarter, the first-tier cities back to lead the rise, becoming one of the most significant features of last year.
In terms of regional distribution, the situation of "hot in the south and cold in the north" continued throughout the year, with cities in the south dominating the rise for a long time, while cities in the north were at the top of the list of declines.
From a longer period of time, there are deep inner motives behind these two appearances. Experts believe that this is not only a reflection of the law of economic growth and the effect of monetary policy, but will also largely determine the future direction of the property market.
The fourth quarter shows the results of regulation
The outbreak of the new Crown pneumonia epidemic is the biggest disruptive factor for the property market in 2020. As a result of sluggish market transactions, home price increases in 70 cities were in a steady decline throughout the first quarter.
The market then rebounded from April 2020, and house prices picked up. In the interpretation of the National Bureau of Statistics, the trend of house prices in April, May and June were "stable and slightly rising", "slightly rising" and "prices slightly rising". During this period, a small number of eastern cities, panic spread, home prices also appeared irrational warming.
Last July, in order to stabilize market expectations, the regulatory layer made a continuous policy statement. In addition to further clarifying the "housing without speculation", "three stability" (stable land prices, stable housing prices, stable expectations), but also put forward "adhere to the real estate as a short-term means of stimulating the economy". In addition, aimed at quantitative management of real estate finance "real estate financial prudent management system" was also proposed for the first time, and is interpreted as an important binding policy for the industry.
At the same time, with the introduction of temporary monetary easing measures during the epidemic gradually withdrawn, the monetary policy returned to the overall tone of "prudent and neutral", from the second half of last year, the property market gradually cooled.
To the fourth quarter, the effectiveness of the control really highlights. According to data from the Bureau of Statistics, from October to December last year, the number of cities in the 70 large and medium-sized cities where new home prices rose has dropped to 45 (including) or less, and the number of cities where home prices fell has also increased significantly. And throughout the second and third quarters, the number of cities with rising home prices was above 50.
According to the Shanghai E-House Research Institute, new home prices in 70 large and medium-sized cities rose an average of 0.1 percent in December 2020 from a year earlier, and an average of 2.1 percent year-on-year, both of which were the lowest since the second quarter.
It's worth noting that first-tier cities are back to leading the way into the fourth quarter. In December last year, new home prices in first-tier cities rose 0.3 percent year-on-year, higher than the 0.1 percent rise in second-tier and third-tier cities, while second-hand home prices rose 0.6 percent year-on-year, significantly higher than the 0.1 percent and 0.2 percent rise in second- and third-tier cities.
Guangzhou became the most active first-tier city in the fourth quarter, with prices of both new and second-hand homes rising 0.7 percent in December, ranking second among 70 major cities.
Because of the earliest and strongest property market control policies, home prices in first-tier cities have generally remained stable for a long time, with few notable ups and downs. Instead, second- and third-tier cities have long led the way in official statistics.
For the first-tier cities of the "reversal", Shanghai E-House Real Estate Research Institute think tank center director Yan Yuejin said to the 21st Century Business Herald, over the past few years, three or four tier cities mainly benefited from the shanty reform dividend, the second tier of cities mainly benefited from the talent new policy, the prices of their prices have been significantly supported. However, as the shanty reform boom subsides and monetary policy returns to neutrality, the value of first-tier cities has re-emerged. Of course, some second-tier cities in the east of the house prices are still supported by a number of favorable, but not yet as much as the first-tier cities of the aggregation effect.
As for the heating up of Guangzhou's housing prices, it is the result of a combination of factors such as the introduction of talent policy, the spillover effect of Shenzhen and Dongguan, as well as the "price depression" to make up for the rise.
Potential impact of population mobility
From the regional distribution, last year's housing prices showed a "hot south and cold north" situation. In terms of the number of cities with rising prices and the rate of increase, the southern cities are stronger than the north. Among them, in December, new housing prices rose more than (including) 0.5% of the city **** Yangzhou, Guangzhou, Fuzhou, Hefei, Xining, Xiamen, Dandong and other 7, most of the southern cities.
After the epidemic stabilized last year, the property market in the south also recovered faster than in the north.
Zhang Bo, dean of the 58 Anju Rooms Property Research Institute branch, told the 21st Century Business Herald that population mobility, especially the relaxation of talent policies in first- and second-tier core cities, has led to an increasing trend of population inflow into the Yangtze River Delta, the Greater Bay Area, and the central Yangtze River City Cluster, and the trend has been very evident in the past three years. Last year, Shenzhen, Hangzhou, Ningbo and other cities with high upward pressure on housing prices are directly related to the growth in demand brought about by population inflow, which is also the main reason for the rapid recovery of the property market in the south after the epidemic has stabilized.
Meanwhile, after several years of sustained regulation, demand is also returning in stages after a deep market consolidation. The return is particularly evident in southern cities such as Shanghai and Guangzhou, and in the north, core cities represented by Beijing are also entering a period of hot return, but the pace is still slower than in the south.
He also said that cities in the north such as Zhengzhou, Tianjin, Jinan and Qingdao have seen significant growth in supply in the land market in 2018-2019, leading to the phenomenon of supply exceeding demand in the market, coupled with an overall low inflow of population, and a slightly weaker continuity of demand growth. These factors have led to the performance of housing prices in the "south strong north weak".
But Zhang Bo believes that this phenomenon will be alleviated to some extent in 2021, and that northern cities such as Tianjin, Jinan and Qingdao, as well as some second-tier cities in the northeast, are likely to see a recovery in the first quarter. However, considering the economic growth and population flow trend, fundamentally, "the south is strong and the north is weak" situation is difficult to completely improve in the short term.
Looking ahead to 2021, policy is still seen as a decisive factor. Most interviewees pointed out that with the gradual implementation of the "three red lines" and the introduction of a centralized management system for real estate loans in the banking sector, the real estate industry will continue to deleverage on both the supply and demand sides, which will greatly help the stable development of the market.
Xu Xiaole, chief analyst of the Shell Research Institute, believes that in the context of the return of neutral monetary policy, the easing of the credit environment for home purchases has bottomed out, as well as the continued deepening of the "one-city-one-policy" policy, the rate of increase in housing prices in cities across the country will be gradually narrowed.
But he also pointed out that in 2021, the market will continue to focus on core cities, so some city prices are still facing greater upward pressure. According to data from Shell Research Institute, in the first week of 2021, cities with high market sentiment indexes are mainly distributed in the middle and lower reaches of the Yangtze River region, with high sentiment indexes in cities such as Shanghai and Hefei, which will see higher upward pressure on home prices in the short term.
Yan Yuejin said, in recent years, China's property market regulation and control means more and more rich and flexible, the long-term mechanism is also gradually landing, so home prices stable is still the probability of future events. Although regional housing prices rising power, but in the "solve the outstanding problems of housing in big cities" policy guidance, the market will not appear big fluctuations.