The overall resilience of second tier cities is strong, and the market recovery is obvious
The trading volume of 2021 ends in October and returns to temperature at the end of the year. Taking the second tier cities of 30 large and medium-sized cities as a sample, the trading volume went down all the way in the second half of the year, completed the bottom in October, and then slowly recovered. The trading areas from October to December were 5.263 million square meters, 6.62 million square meters and 8.598 million square meters respectively, with a year-on-year increase of – 24.6%, – 10.6% and – 7.7%. In January 2022, the transaction area of commercial housing in second tier cities was 6.161 million square meters, a year-on-year decrease of 13.4%, and the decline stabilized; From New Year’s Eve to the fifth day of the new year, the transaction area of commercial housing in second tier cities was 23000 square meters, an increase of 33.5% compared with last year’s spring holiday, and the market recovered significantly.
The transaction price in 2021 will warm up at the end of September. Taking 35 second tier sample cities such as Tianjin and Chongqing as examples, the transaction price began to decline in June, reaching the lowest in September, only 14940.9 yuan / Ping, and then the price rebounded. The average transaction price from October to December was 15927.5 yuan / Ping, 16425.4 yuan / Ping and 16199.6 yuan / Ping respectively. In terms of regions, the overall trend is stable, with the highest increase in the Yangtze River Delta. From January to December 2021, the increase is 12.9%, and the increase in other regions is relatively stable. Among them, from January to December 2021, the increase in the Bohai Rim region is 5.3%, the increase in the central and western regions is 1.6%, and the increase in the Pearl River Delta region is 0.5%.
Taking Hangzhou as an example, under the influence of the tightening of purchase restrictions on August 5 and the repeated epidemic, the real estate market still shows strong market resilience. From the perspective of new houses, the turnover of new houses throughout the year was 209000, a five-year high. By month, the market was relatively cold in the middle of the year. 10323 new houses were sold in January 2022, an increase of 5% at the same time.
Land quality and bidding rules were optimized, and enterprises’ willingness to acquire land was improved
In 2021, the three rounds of centralized land supply will show the characteristics of “one fire, two cooling and three warming”. 22. The second tier cities in the city provided land intensively for the first time, transferring 859 cases, with a flow auction rate of 6.2%; For the second centralized land supply, 1026 cases were sold, with a flow auction rate of 39.9%; For the third centralized land supply, 667 cases were sold, with a flow rate of 22.9%. The turnover of the third round of land supply in second tier cities such as Ningbo, Hangzhou and Chengdu increased, the premium rate increased, and the recovery was obvious.
In the third round of land supply, most cities optimized the land acquisition rules, improved the marginal quality of land supply, and increased the enthusiasm of real estate enterprises to acquire land. Taking Hangzhou as an example, the marginal improvement of the third local auction rules has increased the willingness of developers to participate in the auction, such as raising the price limit of new houses; The land listing policy of “pre announcement” has been restored, the payment cycle of transfer fee has been extended, and the pressure of real estate enterprises’ participation in auction has been reduced; Cancel the “competitive quality and limited sale of existing houses” and replace it with fixed quality; The upper limit of land premium rate was reduced from 15% to 10%, and the deposit was reduced from 20% to 10% of land price, with a maximum of no more than 50 million; After reaching the ceiling price, it will no longer compete for self-supporting or matching construction. Lottery can save more profits for real estate enterprises. The top 3 real estate enterprises with land acquisition amount in 2021 are Binjiang, Greentown and China Resources.
The demand has not disappeared, and as the restraining factors disappear, the demand will be released gradually
The smooth release of residents’ demand for house purchase requires three conditions: qualification, ability and willingness to buy a house. The purchase qualification is mainly affected by the purchase restriction and other urban policies and measures. For the first and second tier cities, the house price is high, the total amount of sets is high, and residents rely on credit, which is mainly affected by the down payment ratio, loan interest rate and other credit environment. The purchase intention is mainly affected by the psychological expectation of “whether the house price will continue to rise” and “whether the future house can be delivered on time”.
The market fell in the second half of 2021, mainly due to the patching of regulation in hot cities, the tightening of mortgage lines, the intensification of the liquidity crisis of real estate enterprises, buyers’ wait-and-see and other factors.
For the purchase qualification, the central bank and the central economic work conference have repeatedly mentioned “meeting the reasonable housing needs of buyers”, and some cities have substantially relaxed the purchase restriction policy through the talent introduction policy. For example, on December 30, 2021, Changchun issued the notice on adjusting and implementing the subsidy policies for talents and farmers entering the city to buy houses, which adopted different degrees of subsidies for different types of talents to attract talents to settle in Changchun.
For the purchase ability, it is mainly through reducing the commercial loan interest rate, reducing the down payment ratio of provident fund and increasing the loan amount of provident fund. The commercial loan interest rate is realized by reducing LPR and adding points. Now the amount of commercial loans is sufficient. The lower housing loan interest rate and faster lending in various places are conducive to the release of demand. For example, the first set of LPR + 120bp and the second set of LPR + 130bp in Hangzhou still have a large room for interest rate decline. The provident fund policy is mainly realized by reducing the down payment proportion of provident fund and increasing the maximum loan amount. For example, Fuzhou issued the notice on adjusting some housing provident fund policies on January 28, 2022, including reducing the down payment ratio of the second provident fund loan to 40% and canceling the time interval of the second provident fund loan; Since January 1, 2022, for families with two or three children who have continuously deposited the housing provident fund for two years, applied for the first time and used for the first self occupied house, the maximum loan limit of the housing provident fund will be increased from 600000 yuan / household to 800000 yuan / household; Nanning announced on January 16, 2022 that the maximum amount of provident fund loan for the first house was increased from 600000 yuan to 700000 yuan, and the maximum amount of provident fund loan for the second house was increased from 500000 yuan to 600000 yuan.
For the purchase intention, with the high leverage real estate enterprises in danger, the local government repeatedly ordered to “guarantee the delivery of the building”, and the buyers are less pessimistic about the market expectation than last year. According to the centralized land supply data, the floor price of different batches of plots in the same region shows a moderate upward trend. The price difference effect of different batches will promote buyers to “enter the market and get on the bus” as soon as possible.
Take Hangzhou as an example, the purchase restriction was tightened on August 5, and 30% of home buyers lost their purchase qualification. This part of demand has not disappeared and will be released slowly in the next 2-3 years. Popular buildings with good house type, excellent location and upside down price still need to wave numbers and fight for social security. Taking Vanke Xingchao Yingfu as an example, it is located in Qianjiang Century City sector and on the Bank of Qiantang River. Opposite it is Qianjiang New City, the CBD, political and financial center of Hangzhou. The project has its own SKP, and Vientiane world business is next to it. The house type is 176-203 square meters, with an average price of 45000 yuan / square meter, and the average price of the surrounding second-hand houses is 70000 yuan / square meter. The first set of frozen capital is 2 million yuan, the second set of frozen capital is 4 million yuan, only 94 sets of houses are available, and more than 5000 people have registered.
Better land supply and larger house type, and improving demand has become an important supporting factor in the future
The supply of high-quality plots in the urban areas of second tier cities has increased. Generally, such plots have large house types and excellent product strength, which is in line with the “demand for quality improvement” in the post epidemic era. From 2017 to 2020, the average sales area of commercial residential units in second tier cities increased rapidly, and gradually maintained at 115 square meters / unit in the past two years, indicating that residents continue to pursue the increase of living space scale.
The popularity of large and improved products is mainly affected by two reasons. On the one hand, with the introduction of the policy of encouraging procreation, as the family size becomes larger, the original small family type no longer meets the use demand. On the other hand, the purchase qualification is scarce, the cost of changing houses and buying houses is high, the “room ticket” is particularly valued, and the demand for one-step location industry is stronger than ever.
According to the annual data of 2021, the market supply and demand of second tier cities are more matched, and the structure is mainly improved. The number of approved listing units and transaction units of ordinary houses with an area of 90-140 M2 exceed 50%. Take Hangzhou and Wuhan for example, with an area of 90-120 m2, they are the main transaction types.
Risk tips
Policy support was less than expected, the market went down more than expected, and the data of sample cities were limited.
