The continued downward trend of second-hand housing market transactions ushered in a change.
In December 2021, the trading volume of second-hand houses in key cities rebounded sharply month on month. Among them, the trading volume in Beijing reached a high point in recent four months, with a month on month increase of 30%.
Industry insiders believe that the main reason for the recovery of the second-hand housing market lies in the improvement of the purchase credit environment, which boosts purchasing power and market confidence. At present, the market transaction has basically bottomed out, and some key cities are gradually coming out of the trough, but there is still a certain distance from the previous high. The low temperature situation has not been completely changed, and the market repair still needs time. It is expected that the market will remain stable in the short term, and the market scale will continue to rise slightly.
the trading volume of second-hand houses in Beijing increased by 30% month on month
According to the statistics of Zhongyuan Real Estate Research Center, in December 2021, the trading volume of second-hand houses in Beijing was 15442 units, up 30% month on month. This trading volume is the highest for four consecutive months since September 2021, close to the market trading volume in August 2021. In 2021, the turnover of second-hand houses in Beijing reached 193100 units, the highest in the last five years.
Zhang Dawei, chief analyst of Zhongyuan Real estate, believes that the trading volume of second-hand houses in Beijing returned to 15000 units in December last year, and the market came out of the trough and is still in a relatively stable cycle.
Zhang Dawei believes that there are three main reasons for the stabilization of second-hand housing turnover in Beijing:
First, the most stringent credit policy has passed. The biggest reason for the rapid freezing of the national real estate market in the second half of 2021 is the tightening of credit. As a first tier city, Beijing has strict policies, which seriously restricts market transactions. However, with the gradual easing of credit policies from October to November, the market has gradually recovered.
Second, the supply of new houses is blowout. As the first round of centralized land supply has basically entered the market, some new residential buyers accelerated the sale of second-hand houses from November to December in order to free up their purchase qualifications and funds, and the demand for second-hand houses has recovered.
Third, as the city with the strictest real estate regulation in China, house prices in Beijing have been relatively stable since 2017. At the beginning of 2021, only a few regional prices such as Haidian, Wangjing and Yizhuang increased relatively, and most regional prices in Beijing were still lower than the same period in 2017. In this case, after the adjustment from September to November, some second-hand house buyers believed that the house price had been adjusted in place and entered the market again, which promoted the stabilization of trading volume.
“The lowest trading volume of Beijing’s real estate market has basically passed. It is expected that the market will still linger on this basis in the first quarter of 2022, but on the whole, as a representative of the most stable first tier city, there is little possibility of sharp rise and fall. With the bottom of policy regulation, Beijing is likely to be the first first and second tier city to get out of the lowest.” Zhang Dawei said.
the transaction in key 50 cities is basically bottomed
from the perspective of national key cities, the second-hand housing market has also ended the continuous downward trend of trading volume since March 2021.
According to the data of Shell Research Institute, from October to December 2021, the monthly trading volume of shell second-hand houses in key 50 cities increased by 8%, 2% and 24% respectively month on month, and the transaction volume of second-hand house market basically bottomed out. Some key cities are gradually coming out of the trough, such as Shenzhen, Guangzhou, Dongguan, Foshan, Shanghai, Hefei and Suzhou.
In terms of price, with the positive changes in trading volume, the month on month decline of the second-hand housing price index in shell 50 cities narrowed for the first time since the current round of decline, with a month on month decline of 0.8%, significantly narrower than the level of 1.7% in November, and the number of cities with falling prices also decreased from 48 in November to 37.
for the reasons for the recovery of the second-hand housing market, the shell Research Institute believes that the main reason lies in the improvement of the purchase credit environment, which boosts purchasing power and market confidence. According to the data of Shell Research Institute, since the fourth quarter of 2021, the average first and second home loan interest rates in key 103 cities have continued to decline, about 10 basis points lower in December than in September, and the average lending cycle of housing loans has also continued to narrow rapidly in recent two months, with a total of 16 days. With the restoration of the credit environment, the market expectation also bottomed out and improved. In December, the prosperity of the second-hand housing market in 50 cities increased from 15.6 in November to 17.4. Among them, the decline of mortgage interest rates in cities in the Pearl River Delta and Yangtze River Delta is generally higher, the intensity of credit easing is relatively greater, and the market repair is also stronger.
The shell Research Institute pointed out that the current round of market downturn is more due to the imbalance caused by the mismatch of credit rhythm. Under various factors, this year’s credit line fluctuated greatly from high to low, resulting in a shortage of credit line in the second half of the year, which is not the problem of the market itself. At the end of the year, with the improvement of the credit line, the market can still get out of the oversold state. From the perspective of the whole year, the real estate transaction volume this year is basically the same as that of last year, new houses hit a new record, and second-hand houses decreased by about 6% compared with last year. According to the current process, it is expected that the trading volume of the second-hand housing market in some core cities will stabilize in the first quarter of 2022 and the price will stabilize in the second quarter.
However, the shell Research Institute also pointed out that the current market recovery is mild, fragile and differentiated, mainly due to the marginal improvement brought by policy correction, and the situation of low temperature has not been significantly improved. In the fourth quarter of 2021, the trading volume of second-hand houses in shell 50 city continued to decline by about 7% compared with the third quarter, and the year-on-year decline was still large, and the absolute level was basically at the low quarterly trading level since 2019. At the end of the fourth quarter of 2021, the aggregate price index of second-hand houses in shell 50 city decreased by 3.6% month on month compared with the end of the third quarter, and the decline expanded month on month. At the end of the fourth quarter of 2021, the prosperity index of the second-hand housing market was 17, which was lower than the level at the end of the third quarter and remained in the recession range.
Kerui research center also believes that based on the recent relaxation of credit policies in many cities, the improvement of residents’ leverage, the market continues to warm up, and the transactions in hot cities have stabilized and rebounded, but there is still a certain distance from the previous high. It is expected that the market will remain stable in the short term, and the scale of the second-hand housing market will continue to rise slightly.
(brokerage China)
