China’s housing market will be stable in February, 2022.
According to the data released by Zhongyuan Real Estate Research Center on the 5th, in January 2022, more than 66 real estate related policies were issued across China, most of which were mainly supportive policies such as loose provident fund policy and talent rent and house purchase subsidy. This is the most intensive period for the introduction of China’s real estate related policies in recent months, up 57% from January 2021.
Since the beginning of 2022, China’s real estate related regulatory policies have continued the policy direction of the fourth quarter of last year. Zhang Dawei, chief analyst of Zhongyuan Real estate, said that recently, the signals of “stabilizing the property market” have been frequent, which mainly has three characteristics:
First, the central government reiterated the “no speculation in housing and housing” and adhered to the “three stability” goal of stabilizing land prices, house prices and expectations.
The central economic work conference at the end of last year reiterated that “we should adhere to the positioning that houses are used for living, not for speculation”, and mentioned supporting the commercial housing market to better meet the reasonable housing needs of buyers. At the National Conference on housing and urban rural development, the Ministry of housing and urban rural development mentioned eight work contents in 2022, among which “strengthening the regulation of the real estate market” was put in the first place. The tone of real estate policy remains continuous and stable.
Second, the credit policy gradually eased, promoting the stability of expectations.
After the overall RRR reduction in December last year, interest rates were cut again at the beginning of 2022, which was tight and the real estate financial environment was loose. Although the interest rate of the five-year LPR (quoted interest rate in the loan market) referred to by the mortgage interest rate was reduced by only 5 basis points, boosted by this, the demand for house purchase began to reverse the downward trend and show signs of stabilization. Mortgage lending in many places also accelerated significantly.
Third, local governments have frequently implemented policies to stabilize the property market, and strengthened policies such as provident fund and house purchase subsidies.
On January 18, Zigong housing provident fund management center of Sichuan Province issued a new deal, which mentioned relaxing the identification of housing units and implementing “only recognizing loans but not houses”. If there is neither housing accumulation fund loan record nor outstanding housing commercial loan, it shall be implemented according to the first house loan policy.
In addition, according to the statistics of Zhongtai Securities Co.Ltd(600918) Research Report, as of January 23, 18 cities or urban areas such as Zhuzhou, Nanning, Baoding, Yulin and Ma’anshan have issued real estate related support policies. The main measures include providing subsidies for talent or three child families, relaxing settlement restrictions and reducing the down payment ratio of provident fund.
These support policies did not lead to a rebound in the property market. According to the statistics of China Index Research Institute, in January 2022, the total land acquisition of the top 100 real estate enterprises was 83.7 billion yuan, a year-on-year decrease of 62.6%. According to a report released by the think tank center of E-House Research Institute, in the first 23 days of January this year, the transaction area of new commercial houses in 100 cities across the country was 17.57 million square meters, down 20% month on month and 44% year-on-year. It will take time for the policy warmth to pass to the market.
